You Applied for a Loan; the Bank Asked for a Financial Audit. What Now?
- July 18, 2017
- by Barsz Gowie Amon & Fultz
You have applied for a business loan and the bank comes back asking for an audit. What to do?
First, don’t panic!
Banks and financial institutions, such as credit unions, routinely request a review of your business’ financial procedures and transactions to get a better handle on risk and stability for the loan. If your private business does not regularly audit its own financial practices, it can actually be a good habit to get into, not only for this one-time loan but for long-term compliance and quality control.
Here are a few tips from the Houston Chronicle’s small business resources to make sure an accounting audit goes smoothly:
- Review the request from the bank carefully to understand timing and information requirements, as well as their preferences on how you present and send them the information. Get clarification if anything is unclear.
- Discuss the audit request with your financial manager(s) and other pertinent company executives. Contact a certified public accountant (CPA) with expertise in financial audits if you don’t have one on staff. Contact legal counsel if appropriate – for example, if the bank is asking for confidential employee or customer information.
- Set up a place to store all documents during the process, and ensure only authorized personnel have access to the files. This may be on a secure network location.
- Gather data and cross-check it against financial reports, the general ledger, payment transactions, and bank statements. Back up the data for added peace of mind.
- Present audit findings. Include a summary letter and any supporting documentation as required by the audit request. Remember, you may be submitting the information to a third-party auditing company or other designated agent.
- Request a “receipt.” Ask the audit contact for documentation of your compliance to the request, along with written notification of any changes requested by the contact or financial institution.
Barsz Gowie Amon & Fultz has a deep understanding of the accounting audit process, and seasoned experts on staff to help your business through the sometimes stressful auditing process. Get in touch with us to find out more.