"What you need and what you want aren't the same things." - Cherise Sinclair

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I! Brought to you by Quest CE I © 2017 I www.questce.com

In the complex, highly regulated financial services industry, audits are a fact of life. Every year, your firm’s internal audit department descends from its corporate headquarters to review your company’s various branch locations - rifling through old documents, interviewing representatives and looking for areas in which your firm may not be fully compliant with an exhaustive, exacting list of standards and regulations.

No matter how well you manage this process, as soon as an audit is announced, it typically leads to long days spent poring over checklists, examining files and prepping reports.

For companies still using a paper-based system, this process becomes even more time consuming and cumbersome then need be. Instead of focusing on identifying areas of risk, auditors are left digging through piles of paper and opaque data to determine whether or not compliance objectives have been met. While a majority of firms have turned to on-demand audit management solutions to streamline this process, others are not yet convinced.

This whitepaper discusses the strategic benefits of transitioning your paper-based audit management solution to an easy-to-use, online platform.

10 REASONS YOU NEED TO TAKE YOUR BRANCH AUDITS ONLINE

INTRODUCTION

“Organize, don't agonize.” - N. Pelosi

NUMBER ONE

DECREASE CLUTTERDECREASE CLUTTER

Reading this at work? Stop. Take a minute and assess your surroundings.

Pop Quiz:

Is your area littered with stray Post-its? Answer ________

Are there random papers scribbled with to-do lists? Answer ________

Are there questionable food crumbs and coffee stains? Answer ________

Do you see binders and papers stacked on top of one another? Answer ________

If so, it’s time to consider the advantages of taking your internal audits online. Clutter threatens your auditors’ day-to-day workflow and puts your firm at risk of damaged, lost, or even stolen documents. With a web-based audit management solution in place, your firm can strengthen the efficiency of your audit staff by aggregating policies and procedures into a single online repository, enabling quicker and more thorough response to investigations.

The days of the black audit binder are gone. Here to stay is today’s automated technology.

10 REASONS YOU NEED TO TAKE YOUR BRANCH AUDITS ONLINE

Going “green” could save your company more money than you might think.

In fact, according to PricewaterhouseCoopers, the average organization spends about $20 in labor to file each paper document, approximately $120 in labor searching for each misfiled document, and $220 in re-creation of a document. Once you factor in the cost to print, transfer and warehouse materials, the total cost is astronomical.

With an on-demand Branch Audit Management Solution, firms can lower costs by automating document retrieval/retention, reducing paper overhead and eliminating manual, time-consuming tasks. Digitizing documents also frees up storage space and reduces the costs associated with shipping/mailing paperwork across company facilities.

Pop Quiz:

How much does your company spend per year to manage paper? Answer ________

“The way to build your savings is by spending less each month.” - Suze Orman

10 REASONS YOU NEED TO TAKE YOUR BRANCH AUDITS ONLINE

NUMBER TWO

$20 to file documents$120 to find missing documents$220 re-creating documents

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"I have so much paperwork. I'm afraid my paperwork has paperwork." - Gabrielle 2evin

Imagine the following scenario

You're a senior branch examiner that just arrived

onsite for an internal audit. With your morning

coffee in one hand and an oversized binder in the

other, you're ready to begin your inspection.

Before long, however, you become bogged down

with the chaos of having to flip through hundreds

of paper policies, procedures and checklists.

Not to mention the fact that your right hand has

started to show early signs of carpel tunnel from

feverishly jotting down notes. You think to

yourself, "There must be an easier way!"

r • •

•

And of course, there almost always is. On-demand audit management technology can help

your firm create a centralized location for easier access to information, allowing auditors to

seamlessly create and initiate audit assessments from the convenience of a laptop or tablet.

Need to locate a policy? Find it in seconds using the platform's Search feature.

Want to know your ongoing Audit Risk? It's automatically generated.

Interested in learning more about a rep while onsite? Click for their complete audit history.

Honestly, it's that easy!

I! Brought to you by Quest CE I © 2014 I www.questce.com

Even at their most detailed use, excel and paper-based documents can only provide auditors with a limited view of their firm’s operational risk.

Using a web-based audit management system, firms can automatically generate and distribute detailed audit reports, replacing the cumbersome process of manually dissecting data on an audit-by-audit basis. By streamlining this process, firms can free up time and resources being spent to aggregate and format reports and provide compliance administrators with the ability to identify real-time trends impacting the organization’s performance. In seconds, track the satus of each nationwide branch audit, its corresponding risk deficencies, auditor feedback, questionnaire responses, and much more in an easy-to-view summarized report.

“Many reports are contradictory; even more are false, and most are uncertain.” - Carl von Clausewitz

NUMBER FOUR 10 REASONS YOU NEED TO TAKE YOUR BRANCH AUDITS ONLINE

While on-demand audit management technology cannot automatically make your firm compliant, it can ease the burden of complying with increasingly stringent examination rules, recommendations and requirements.

In 2011, the SEC’s Office of Compliance Inspections and Examinations (OCIE) and

FINRA jointly issued to the broker-dealer community guidance on best practices

for implementing internal branch office inspections. These suggestions, while not

intended to be exhaustive, provide a roadmap of the regulators’ conception of a

robust inspection program. Of particular note, was its focus for firms to tailor their

branch office inspection programs to identify risks specific to each branch

location. How did they recommend firms do this? By “using surveillance reports

and employing current technology and techniques.”

Using technology to drive root cause analysis is by far one of the easiest and most efficient ways to identify and manage risk. By monitoring the real-time performance of an audit, firms can proactively identify compliance gaps and initiate quick remediation, avoiding fines, negative press, and legal actions associated with compliance failures. Additionally, audit trail functionality ensures that all electronic correspondences are archived and time-stamped to dictate accountability and comply with all books and records requirements.

“I can't understand why people are frightened of new ideas. I'm frightened of the old ones.” - J. Cage

NUMBER FIVE 10 REASONS YOU NEED TO TAKE YOUR BRANCH AUDITS ONLINE

Today, the connection and communication between your firm’s internal auditors, branch supervisors and compliance professionals is more important than ever. Too often, internal audits fail to address risk areas that may have the most impact on the organization’s objectives because they’re more focused on gathering information then they are using it. Failure to use information, metrics and assessments performed by risk and compliance analysis often leaves internal auditors in the dark about what really matters, or at least creates redundancy and wastes resources as audits are performed.

Advanced capabilities such as risk alerts, notifications, and trend analysis can help drive conversation among staff, creating a more transparent audit environment.

What’s more, your program administrators will never have to call, email, or text to check-in on the status of the audit because they’ll be able to review the actual audit as it occurs in real-time by simply logging into the system.

By hosting audit procedures online, firms can facilitate interaction between their auditors, branch supervisors and representatives, ensuring that all parties are in close coordination with risk and compliance functions.

“When the trust account is h igh, communication is easy, instant, and effective.” - Stephen R. Covey

NUMBER SIX

DRIVE CONVERSATION

10 REASONS YOU NEED TO TAKE YOUR BRANCH AUDITS ONLINE

Even a locked file cabinet is vulnerable to being broken into by someone with prying eyes.

Your paper documents are not safe from those who really want to see them. In a paperless office, you can add several levels of security to keep unauthorized persons from seeing sensitive material.

The best web-based audit management system will allow your firm to set individual and role-based login credentials for varying users within the system. This ensures that documents are protected from retrieval or alteration with function and access rights. Though many are still concerned with the idea of putting sensitive data online, secure storage systems still offer more layers of security then a small lock on a filing cabinet (i.e. dedicated firewalls, intrusion detection systems, user tracking, etc).

The comprehensive security

standards of a digital repository gives

your organization more control when

compared to paper documents that

can easily be copied, removed,

altered or forwarded.

“There is no such th ing as perfect security, only varying levels of insecurity.” - Salman Rushdie

NUMBER SEVEN

INCREASE SECURITY

10 REASONS YOU NEED TO TAKE YOUR BRANCH AUDITS ONLINE

Every year, FINRA invests more time and resources into developing its technology so that it can more accurately identify brokers at higher risk for violations. FINRA’s Comprehensive Automated Risk Data System, CARDS, is a perfect example of this commitment to use technology to better leverage the information it receives.

Regulators have long traded in their standardized ‘check-box’ audit approach for analytically-charged audit management technology that uses data to more efficiently target potential risk.

As a firm, can you say the same?

Pop Quiz:

Are you constantly reviewing your audit procedures? Answer ________ Are you looking for ways to more holistically target risk exposures? Answer ________

To successfully compete in today’s relentlessly fast-paced industry, firms will need to become more data informed and technology empowered, especially when it comes to audit management.

“If you see the bandwagon, it’s too late.” - J. Goldsmith

NUMBER EIGHT

STAY UP-TO-DATE

10 REASONS YOU NEED TO TAKE YOUR BRANCH AUDITS ONLINE

How many times have you gone to the store

and pulled out your grocery list only to see a

combination of letters and abbreviations?

“Buy more BBB”… what did I mean by that,

again? Ahh yes, we need more Blueberry

Bread! Before you know it, a trip that should

have taken only 20-minutes soon turns into

an hour-long guessing game.

This event can best be described as “being human.” Our attention span is limited, memories are fleeting and handwriting has better been described as ‘chicken scratch’.

This is where technology comes into play.

Having an on-demand branch audit management solution helps reduce “human error.” Online forms and policies are standardized, typed text is legible, risk is automatically calculated, reports are auto-generated and you don’t have to worry about lost or stolen documents. By creating a controlled audit environment, you help improve your firm’s operational efficiencies and increase employee productivity.

“To err is human.” - A. Pope

NUMBER NINE

ELIMINATE ERROR

10 REASONS YOU NEED TO TAKE YOUR BRANCH AUDITS ONLINE

Things pop-up during live audits, causing agendas to unequivocally change. As a firm, you want to be sure that your solution, paper or otherwise, is flexible enough to handle these types of last-minute adjustments, without compromising the fluidity of your audit.

With the right audit technology in place, your firm should never have to. While a majority of paper-less audit solutions offer a level of process consistency to enforce compliance standards, the industry’s best solutions were built to mirror the conversational and, at times, sporadic format that a live audit can take. Advanced features such as click-to-collapse surveys, automated bookmarking, and offline sync capabilities help bring to life this type of ‘anytime, anywhere’ audit experience.

“The measure of intelligence is the ability to change.” - A. Einstein

NUMBER TEN

BE FLEXIBLE

10 REASONS YOU NEED TO TAKE YOUR BRANCH AUDITS ONLINE

Brought to you by Quest CE | © 2014 | www.questce.com

The paperless office concept has been around since the 1960s or ‘70s, much like the flying car. And although the film “Back to the Future” predicts we’ll all be driving in the skies by 2015, I’m going to go out on a limb and say we’re a lot closer to attaining the former.

We live in a digital world. The reality is that electronic documents are now part of corporate America’s everyday life. If they aren’t a part of yours, you need to ask yourself why not.

So what do you say?

If you’ve had it with the headaches, frustrations, costs and paper cuts caused by your current audit workflows, give us a call at (877) 593-3366 or e-mail info@questce.com to discuss how Quest CE’s branch audit management solution can help you.

10 REASONS YOU NEED TO TAKE YOUR BRANCH AUDITS ONLINE

IN CLOSING

“Great Scott!”