Audit Season Starts Long Before the Auditor Arrives

It’s news that few bankers look forward to receiving—your next audit has been scheduled for 30 days from today.

As the sinking feeling settles in, your mind races with the many administrative tasks in your future. From pulling requested loan files to tracking down missing documents and following up with borrowers, there’s a lot of work to be done. You wonder if there’s a better way, but now is not the time to reimagine the process. After all, the clock is already ticking.

Although audits and exams may never be something you enjoy, there are steps you can take to make them less unpleasant. Following sound recordkeeping practices and implementing the right technology are at the top of the list.

Ineffective Recordkeeping and the “Audit Scramble”

Auditors and examiners need to access a variety of information to complete their reviews. Large commercial loans are often a focal point due to the risk they pose.

Without the right approach, commercial loan files can become messy and difficult to navigate. That’s partly due to ongoing debt covenant monitoring and collateral tracking. Borrower financial statements, insurance records, account receivable statements, and UCC continuations keep arriving and must be promptly filed to avoid issues.

Having the right people on your team reduces the risk of oversights, but there’s still plenty of room for error—especially when manual tracking techniques are employed. Challenges include:

• Collecting the wrong documents due to outdated loan file checklists
• Failing to clear exceptions when documents arrive
• Clearing exceptions prematurely (or inaccurately)
• Saving documents to the wrong loan file or loan file tab

Oversights perpetuate the “audit scramble” mentality, which isn’t healthy for your financial institution (or the auditor).

Audit Season is a Year-Round Endeavor

Banks and credit unions should think of “audit season” as a never-ending initiative that requires proactive exception management, efficient workflows, and intelligent technology. At Alogent, we believe selecting the right technology is a key enabler for better audits and exams. Our AccuAccount software was built specifically for the needs of commercial lending, including audit and exam prep.

Point-and-click audit prep: Generating a digital audit or exam file takes minutes, not days. Staff can easily search for and find loans, prepare the audit file, and provide electronic access to the requested information.

Integrated imaging and tracking: Staff can instantly clear exceptions by electronically adding documents into their correct locations in AccuAccount. That essentially eliminates the need for manual ticklers and exception spreadsheets.

Aging exception reports: Knowing “what’s missing” and for “how long” should not require days of manual data manipulation. By tracking and clearing exceptions in AccuAccount, staff enjoy instant access to reliable, prebuilt exception reports. Better yet, exception emails keep lenders, executives, and loan admins informed without leaving their inboxes.

Staged notices: Some borrowers need multiple “nudges” to provide documentation. Compressing these nudges into the pre-audit timeframe isn’t pleasant for anyone, including the customer or member. Staged notices in AccuAccount offer a simple, logical way to proactively request documentation without being pushy.

Interested in reimagining your audit prep workflow? 

Contact us for a demo of AccuAccount

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