Summary
Many players in the industry understand audit risk and have developed flexible audit programs to target potential risk profiles, as well as new credit structures and financial products. The execution of a responsible field examination department will be driven by additional factors, including the dreaded SALY (same as last year) audit. Management can design flexible programs, yet the field examiner can choose to ignore the changing risk profile of the borrower and complete the same audit that was done the last time. Secured lenders have the tools to avoid the SALY syndrome. Another tool at the hands of secured lenders is the "out of cycle" request for an audit. The field examiner can approach every audit by starting at the top and working down the "accounting pyramid", which includes financial statements, adjusted trial balance, and general ledger trial balance.
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Extract
Audit Risk: Part Two
Many players in the industry understand audit risk and have developed flexible audit programs to target potential risk profiles, as well as new credit structures and financial products. Does that complete the responsibilities of senior management and field examination management? It provides a starting point, but the execution of a responsible field examination department wil...
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