Audit

An audit is a structured review of records, files or procedures conducted to verify accuracy and assess compliance with an applicable standard or requirement. The reviewer examines documented evidence and records the findings for further action when needed.

Valuation intersects with audits in several ways. Lenders may conduct post-closing quality control audits on loan files to determine whether the appraisal was properly ordered, supported and documented. State regulators may examine appraisal management companies for licensing, recordkeeping and fee practices. Investors may also review files before purchasing loans on the secondary market.

An audit finding may lead to additional documentation, a corrected report, a compliance action or, in some cases, a loan repurchase. Clear support, complete disclosures and a traceable ordering history help files withstand review and demonstrate the controls that compliance programs are designed to maintain.