Wouldn’t it be nice if an audit were a cookie cutter process that you could just plug into every year?
But change is inevitable, and the truth is that the landscape of the audit is going to change each year.
For instance, while you may occasionally be blessed with the same auditor each year, it is more likely that a new face will show up at the door.
State law is a juggernaut of change, and new laws mean new ways of doing things.
The updated American Land Title Association Best Practices have invoked new data that must be included and new requirements for managing third party providers.
In consideration of this fresh new landscape, you need a plan.
Review Best Practices updates
If you haven’t done so already, comb through the Best Practices with your staff to ensure the implications of each update are understood by the relevant department managers and has been implemented appropriately.
If the new requirement involves documentation, assess how that information is being gathered and stored and how easily it can be produced in a cogent fashion for the auditor.
Refresh your knowledge of new legislation
Your state land title association may keep a repository of all new legislation affecting title insurance and real estate sales. Now is the time to refresh your knowledge of all laws that will take affect this year that could impact how you manage and report transactions.
This is equally imperative when it comes to federal rules and regulations. For instance, the Financial Crimes Enforcement Network (FinCEN) announced the renewal and expansion of its Geographic Targeting Orders (GTOs) in October 2023. These reports are mandatory and assist the government in tracking illicit funds or activity, so make sure you are up to date on what transactions must be reported.
Establish communication with your auditor
Getting to know your auditor and what their expectations will be can go a long way to smoothing out the rough edges of your audit.
Verifying with the auditor what materials they will want to see and the most advantageous way of presenting those materials can go a long way to helping you more successfully plan for the audit. And often, the auditor can provide you with some helpful resources that will guide your preparations.
Keep up with the paperwork
It is obvious that an audit will go much more smoothly if you have kept your files up to date all year long.
The beginning of the year is a perfect time to review all of your processes and procedures and bring any records up to date that may be lagging behind.
Review last year’s audit report
You may have shoved last year’s report in a drawer and forgotten about it, but this may be an opportune time to pull it out to see if there were any areas of improvement that were recommended the last time around. The auditor will have access to this report and may have a keen eye out to see if last year’s issues were addressed properly.
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