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CHECKLIST: Preparing for Examination

  • Written by Jeff Raff and Stephanie Beach

It goes without saying that the default servicing industry has been under intense scrutiny in recent years. Law firms in the industry have experienced their fair share of onsite audits and compliance reviews. The key to a successful audit is proper preparation. Having the right tools ready before each audit begins allows businesses to showcase the resources devoted to compliance, while at the same time using this self examination to make positive changes and improve processes along the way. This checklist will help you transform an upcoming audit from what may appear to be a daunting day of scrutiny into a valuable opportunity to improve your company and your company’s relationship with your client.

____ Policies: Clearly document policies that address everything from regulation adherence, such as a Fair Debt Collection Practices Act Manual, to employee background checks.

____ Policy Versioning and Maintenance: Demonstrate active review and policy maintenance.

____ Documented Compliance with Policies: Store adequately written records to support your policies. For example, having an Employee Training Policy is great, but documenting staff attendance at company training is the real key.

____ Procedures: Be prepared to actually walk the auditor through your company’s day-to-day processes. The ability to present the auditor with your written policy and then allow them to witness staff adherence is essential to a successful audit.

____ Audit Team: Have the right “hands on deck.” An “audit team” is often a good idea.

____ Pre-Visit Information Gathering: Gather the requisite information before the visit. Your company will appear organized and efficient to the auditor, and the auditor will be able to see a snapshot of your organization’s “present state.”

____ Pre-Visit Questionnaires: Maintain a list of key responses for pre-visit questionnaires to ensure delivery of consistent responses.

____ Presentation: Deliver a polished and complete presentation. If you don’t know the answer, simply state that you will follow up to provide the most thorough response.

____ Current Projects: Be open about your progress and your timelines on ongoing projects. This will help the auditor offer feedback that is useful and insightful.

____ Point of Contact: Identify one or two points of contact for the auditor.

____ Technology Controls: Be prepared to discuss and demonstrate your IT and information security controls. Maintain a knowledgeable point of contact at your IT vendor and the ability to translate between the IT world and the business world.

____ Third Party Management: Develop a documented third-party vendor review process that includes performance monitoring and audits.

____ Practice: Conduct a “dry run” of an audit to test your company’s preparedness. As a final note, often these auditors have traveled to numerous companies across the country and have a great deal of insight that they share through direct feedback and follow up reports. Remaining cordial, transparent and, most of all, being well prepared will allow you and auditors to get the most out of their visit.

Co-authored by Jeff Raff and Stephanie Beach of Trott Law, P.C. Jeff serves as managing partner, and Stephanie is associate corporate counsel. Jeff can be reached at This email address is being protected from spambots. You need JavaScript enabled to view it. and Stephanie is available at This email address is being protected from spambots. You need JavaScript enabled to view it..