One of the things we talk about a lot in this blog, whether explicitly or not, is the credit union audit process. In fact, improving the audit process is what we’re all about.

But what does it mean to have an effective audit process? What all does it entail?

If you’re looking to better understand what makes a credit union’s audit process effective—or if you want to see if your audit process passes muster—then read on!



The Short Version

Our abbreviated definition of an effective credit union audit process goes something like this:

An effective audit process is when a credit union audit team develops a regular set of processes that ensure timeliness and accuracy.

That’s it.


The Long Version

As you no doubt noticed, the short definition for an effective audit process is very short and rather broad. It’s mostly geared toward obtaining the desired results: a complete audit, turned in on time.

But what goes into ensuring those desired results? What are the characteristics of an effective audit?

Here’s the long version:

An effective credit union audit process requires two things: accountability and consistency.


1.    Accountability

Accountability is about making sure that everything executes in an expected way and that it executes on time.

For example, if you have a document request item out to one of your business areas, then that business area is responsible for that item. Accountability means that they do their job so that the item comes back on time.

Similarly, if you have a manager responding to a finding, they must answer and review on time so that you can pass those answers back to your auditor on time.

Ensuring that everyone is aware of their duties and on top of their deadlines is a critical component of accountability. An effective audit process prioritizes responsibility and accountability.


2.    Consistency

The second critical component of an effective audit process is consistency.

You can imagine how important consistency is to governing bodies such as the NCUA, right?

Auditors want to see that you’re doing things the right way, every time. There’s little room for going rogue. No room for cowboys. Audits aren’t the wild west. Your credit union’s audit team has to be able to deliver consistent results, or else bad things happen.

Bad things like repeat findings.

Consistency helps credit unions dial in their process. Practice makes perfect, after all. Part of having an effective audit process is having an efficient one, and credit unions who continuously conduct their audit duties the same way, month after month, and year after year are in the best position to optimize their process.


The Benefits of Effective Audit Processes

There are numerous benefits to developing and executing an effective audit process. The most important benefit is that your credit union will get great audit results. Or, if your results aren’t great, you’ll be able to quickly address any findings or recommendations.

However, effective audit processes have peripheral benefits as well.

Consider this: an effective process is far more satisfying than an ineffective one. For starters, having an effective audit process is crucial for job satisfaction.

Not only that, but effectiveness helps both teams and team members develop confidence in what they’re doing. That confidence helps them feel good about their audits and sleep well at night. More importantly, that confidence allows each team member to perform their duties without worry:

  • They won’t feel like they have to babysit other team members
  • They trust each other to do their part quickly and effectively
  • They trust themselves to answer or address things correctly—no second guessing

All the above makes for more than an effective audit process—it also makes for a more enjoyable one.

So, the next time we talk about an effective audit process (or what one looks like), you’ll know what we’re describing.


Further Reading About Audits

Audits are constant. They’re also kind of “our thing.”

We’ve put together a list of useful resources to help credit unions successfully navigate audits, whether it be their first or fiftieth. For example, we created a credit union audit checklist that’s free for anyone to use.

Alternatively, you can follow the links below to read more about credit union exams and preparation tips.

HOW THE NCUA AIRES QUESTIONNAIRES CAN HELP YOUR CREDIT UNION PREPARE FOR YOUR NEXT REGULATORY EXAMINATION

THE HIDDEN RISKS IN CREDIT UNION REGULATORY EXAMINATIONS — AND HOW TO AVOID THEM