Be Ready: Preparing for a FINRA Audit

Businessman auditing

The Financial Industry Regulatory Authority (FINRA) sends out thousands of letters every year notifying companies that they face an audit. Most financial institutions receive these letters, especially brokerage firms. FINRA aims to give investors a stable and safe market. Their regular audits ensure that.

That sounds great for investors, but if you are the owner of a firm facing an audit, that isn’t as reassuring. It doesn’t help that FINRA looks at the data of your company from specific time frames. If you make no preparations for it, it can be very time-consuming and require many resources. This is why you should not wait for that letter from FINRA. Start preparing for that audit today, and you will have no problems in the future. Here are some tips on how to do just that.

Know Where Your Data Is

One of the first things you should know is exactly where your data is. Companies keep on producing more and more data each year as people increase their digital usage. This makes knowing where your data is more difficult. For example, your employees may work on their laptops, desktops, and tablets. If they are company-related, they need to be collected for the audit.

Having an idea of where your data makes it easier when the audit comes. No need to scramble around thinking of where the data is and checking. All you need to do is to start in the specific areas in your IT infrastructure to start the process.

Have a Data Preservation Team

Data preservation teamAnother aspect of the audit is that it will check particular time frames. In our digital world, it is so easy to delete things or to have them written over. It is especially bad when it comes to social media. Your company’s Facebook page and other sites are things that FINRA need to see. Your company website is also part of that. The trouble is that updating your website can change it and make things complicated. This is where the right website capturing software can help. Have one regularly running so that there are screenshots of the needed websites at particular times.

It is not just your websites. Data and records have to go into an archive. This places them in a separate place outside of your server so that it doesn’t occupy needed space or slow down your operations.

Know What the FINRA Is Looking For

A FINRA audit is not going to look at everything. They do not care if your company had its outing in August or other e-mails like that. To make it easier for them and also to save on your storage needs, you will only want to keep the important data. This includes the exchanges between your managers and high-stake brokers, your customer list, transactions, and the reasons for money transfers to third-party accounts. Having this data ready makes it easier for you and the audit.

The FINRA does not do audits lightly. You will be sure that they will be thorough when it comes to looking at your data and records. If you followed the advice above, though, you should not worry. Proper data management means that you will be able to show the agency everything that they need.

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