Overcoming Frustration: Audit & Exam Preparation at a Bank

What are your biggest frustrations when it comes to preparing for external audits and examinations?audit exam prep

To answer this question, we recently surveyed 187 community banks. You can download a summary report of the study here.

After looking at all of the answers, we feel that one banker summed it up nicely when he said:

1. It is time consuming.

2. It interrupts the flow of regular daily duties.

3. It’s hard to find the documents required for the audit.

His sentiments seem to be echoed by many of the professionals that we surveyed. In this article, we’ll examine each of these points individually and take a closer look at the data.

Audit Preparation is Time Consuming

When asked what creates the most administrative work for an institution, external audit and exam prep certainly takes a bite out of productivity for many small to mid-sized banks. Taken together, they comprise more than 50% of the responses. Going beyond that, over half of those surveyed (58%) report spending 20 or more man-hours on this task. More than 90% say they devote at least five hours for preparation.

Daily Duties are Interrupted

Not only are resources pulled away from day-to-day operation, but staff time continues to be drained during the audit itself.

“We take a lot of time to prepare both electronic and paper copies of requested items for the exams,” another banker explained. “When they [auditors] come on site it feels like they didn’t even look at what was provided and we wind up providing it again in person.”

In fact, 15% of those surveyed chose duplication of effort as their biggest frustration when it comes to the audit and examination process.

Documents are Frequently Lost or Misplaced

Our survey indicates that not many of the respondents have taken full advantage of the banking software available to them, thus making it harder to lay their hands on the documents they need to find. Although only about 15% of institutions rely solely on paper loan files and documents when preparing for an audit or exam, another 66% provide auditors/examiners with a mix of paper and electronic files.

This means that over 80% of the institutions are still depending on at least some paper documents for this process. It also indicates that 80% of the banks are likely to experience the frustration of lost or misfiled paperwork.

What’s the Solution for Better Audit and Exam Prep?

“I’m sure there’s a way it could be done mostly electronically,” said one of the respondents, “which would save time on both the bank’s end as well as the auditor’s end. The man hours could be spent more productively and the auditor could get their work done and move on to their next assignment.”

This banker’s peers overwhelmingly agree. Our survey found that 98% of respondents felt that a document management system including electronic audit/exam export features is either “definitely” or “probably” a good investment.

Is your bank looking to increase efficiency when preparing for an external audit or exam? AccuSystems can help reduce the wasted time and frustration associated with this pain point.

Click here to request a demo of AccuAccount’s electronic audit preparation process.

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