- 2 weeks ago
- #escrowaudit
- #titleagency
- #reconciliation
We’re guessing that escrow audits aren’t necessarily your favorite part of the job. The reality is that they’re unavoidable. And when title agencies find themselves scrambling, it’s usually because reconciliation and documentation have fallen behind.
The good news is that escrow audit readiness doesn’t have to be stressful. While escrow audit requirements vary by state, regulator and underwriter, there are several consistent expectations auditors typically share. This article outlines practical steps you can take to stay prepared year-round.
#EscrowAudit #TitleAgency #Reconciliation
The good news is that escrow audit readiness doesn’t have to be stressful. While escrow audit requirements vary by state, regulator and underwriter, there are several consistent expectations auditors typically share. This article outlines practical steps you can take to stay prepared year-round.
#EscrowAudit #TitleAgency #Reconciliation
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NewsTranscript
00:05escrow audits they're not exactly anyone's favorite part of the job but they're unavoidable
00:11and for title agencies that aren't prepared an audit notice can trigger a scramble that's
00:17entirely preventable here are some practical steps you can take to stay prepared year-round
00:25when an auditor arrives they're going to ask for documentation
00:29typically the last two to three months of monthly reconciliation reports that means having
00:35specific records ready to go here's what they want to see bank statements for the reconciliation
00:41period reconciliation summary and trial balance statement proofing register bank adjustments and
00:49book balance and any outstanding receipts and disbursements report beyond the paperwork auditors
00:56are looking for red flags that signal process gaps or breakdowns things like negative file balances
01:04aged or unresolved deposits in transit stale payoff or tax checks outstanding wires or unidentified
01:14ledger balances at the center of all of this is the three-way reconciliation a three-way reconciliation
01:24confirms that three key figures are in alignment the bank balance the book balance and the escrow trial
01:32ledger balance alta best practices required every month and underwriters use it as their primary measure of escrow
01:40account accuracy when these three things align it confirms that what's in your bank account matches what's in your
01:47system right down to the individual file level the catch reconciliation is cumulative fall behind one or two months
01:56and you're compounding inaccuracies get an audit notice in that window and now you're doing catch-up work against a
02:03tight
02:03deadline here are two best practice controls to remember the reconciler should not have check signing authority and
02:10management must review and approve monthly reports
02:18some agencies take it a step further with daily reconciliation matching transactions to escrow books
02:24every day so discrepancies stay small and manageable here are a few daily habits that reduce audit risk
02:31match incoming and outgoing transactions daily clear routine items promptly review exception reports for irregularities
02:40finally monitor for stale or aging items monthly the focus shifts to clean up resolving unidentified or
02:49negative balances reviewing aged deposits and wires and confirming all disbursements have cleared when
02:57these habits are consistent your audit ready every day not just when the notice arrives but when an audit notice
03:05does land a structured checklist is important it should look something like this read the audit letter
03:12immediately and clarify expectations early loop in any third party reconcilers right away gather
03:20reconciliation reports for the prior three months resolve aged items and unidentified balances document how
03:29discrepancies were researched and remove former employees from all bank signatory lists
03:36one more thing auditors are people a cooperative responsive approach makes everything go smoother
03:47for most agencies the challenge isn't knowing what to do it's finding time to do it alongside daily operations
03:56reconciliation doesn't directly drive revenue so it can slip that's where soft pro comes in
04:02soft pro delivers accurate timely monthly three-way reconciliations optional daily reconciliation support clear
04:10exception identification and complete reporting and a dedicated reconciler assigned to your accounts
04:17whether you reconcile in-house or use a partner keeping your trust accounts in sync means you can face any
04:23audit with confidence
04:25changes
04:25you
04:26you
04:26you
04:27You
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