I've spoken with many advisors over the years. Some owned their own one-man advisory shop and others worked for a smaller firm. Whenever the subject of an audit came up, many said they hadn't been audited in years, and some even said they'd never been audited. Well, as luck would have it, I've drawn the short straw. I've received notification of an audit.
Years earlier, when I was the principal at another firm, I was responsible for this process. We were audited and the regulators came in, reviewed the necessary material, and left. Then, about two weeks later, I received a letter with the items that needed to be addressed. They call this a deficiency letter. We were given 30 days to make the necessary corrections. Now I will go through this process as a business owner. In the notification we received, there was a list of the items they are requesting to see. Items such as parts I and II of our most recent ADV, our policies and procedures related to operations, our balance sheet, and our privacy policy, just to name a few. As I look through the list, some of the items are readily available and some will require preparation.
