A Handy Checklist for RIA Audit or Examination Preparation

If the words “audit” or “regulatory examination” make your stomach cramp with anticipation, as a registered investment adviser (RIA) that is subject to audits from the Securities and Exchange Commission (SEC), there are easy, proactive steps you can take to reduce your anxiety.

Administer a vigorous, adaptable, and well-documented compliance program:

• Ensure your compliance program includes policies, procedures, and controls to meet books and records and supervision obligations.

• Implement regular reporting and compliance check-ins to monitor adherence to regulatory requirements and annual examination priorities.

• Keep records of compliance reports, including internal assessments, findings, and actions taken.

Review records and insights from your previous audits or examinations:

• Review previous audits and examinations to ensure gaps are closed.

• Create a plan to address the areas that were most concerning.

• Document any changes made to the compliance program since the last audit or examination.

Assign your team clear roles and responsibilities:

• Ensure sufficient staffing and that staff members involved in an on-site or remote RIA surprise audit or regulatory examination are adequately trained for interviews and interactions.

• Document roles and responsibilities in your compliance manual for reference.

• Monitor staff knowledge and performance through assessments and periodic evaluations.

Schedule routine system reviews:

• Routinely review your compliance infrastructure and program to know where and how to find the reports and data needed for a regulatory examination or RIA SEC audit.

• Customize your program to a risk-based approach depending on the need for more assessments such as priority or deficiencies.

• Establish a schedule for internal training and reviews to maintain ongoing compliance.

Prepare for anticipated examination priorities:

• Make sure to follow trends and predictions for audits from your regulatory authority and news sources.

• Regularly review and update compliance policies, procedures, and manuals to reflect current regulations and changes to your business practices.

• Document the steps taken to address regulatory changes and ensure compliance.

But preparing for an audit or examination is sometimes easier in theory than in practice, especially if your compliance team is already overwhelmed or understaffed. An unexpected audit quickly becomes a serious disruption if you need to pull staff away from projects or pay for expedited support from your compliance technology provider. That can lead to unexpected costs and put undue strain on your organization.

Look no further than Audit Assist, a service designed to give your organization peace of mind and confidence that you are prepared for your next audit. Audit Assist removes the burden of preparing for an audit by yourself and enables our experienced Data Services team to better serve your needs.

Audit Assist from Smarsh

A subscription service, Audit Assist provides support for your next audit or exam. If you undergo an audit or exam, having Audit Assist ensures you have access to expedited data export services and includes unlimited self-service data exports no matter which package level is chosen. You will also have access to a wide variety of helpful resources, best practices, and FAQ documents.

For those who opt for an “Advanced” package, we also include market-leading professional services, such as complicated data delivery that require two dynamic search terms within a specified range of each other. Web-based training from Smarsh University provides helpful information about using Smarsh products for audits and other use cases. Learn more about Audit Assist and how having an audit partner with Smarsh can save you both time and unexpected costs.