What a Proper Audit Looks Like

A proper audit is disciplined, courteous, evidence-led fact-finding. It surfaces discrepancies, invites reconciliation, and channels outcomes into findings and remediation. It does not posture. It does not pre-judge. It gives decision-makers clarity.

A Calm, Proper Audit in Practice

I worked in a tech‑compliance department at a large multinational financial institution in Tokyo. I reported to the internal officer who faced off with regulators. To be clear, this was not my audit directly; it was one degree removed. I assisted with collecting supporting material in responses. The auditors operated thoughtfully and formally.

The audit was announced well ahead of time, which gave us plenty of time to prepare. The lead arrived politely and courteously. His demeanor and approach made it clear he would leave no stone unturned and that he knew which questions to follow up with. He showed no fatigue, no matter how deep into the details we went.

In the first round, he did not judge. He noted observations. Then came a long list of discrepancies. Those were not findings, and they were not accusations. They were the prompt for the next step: reconciliation. We had to provide substantiation showing, for each discrepancy, that it was in line with regulations or otherwise justifiable. When our answers raised new questions, there was calm back‑and‑forth.

After that, he issued preliminary findings. Sometimes there were no issues. When there were issues, an understanding auditor left us a path to remedy them. In severe cases, you may face disciplinary measures—fines, removal of a license, and so on—but usually we put together a remediation plan. The auditor reviewed it for basic reasonableness and for coverage and completeness, making sure it addressed all issues. Then there was oversight to closure.

That is a proper audit: a professional fact‑finder who seeks to understand and oversees your progression into having mature process. Not affected by high stakes. Not intimidated by the volume or complexity of data. Not posturing for importance. Simply doing the job as intended—to ensure operations are free of impropriety.

The Steps of a Proper Audit

A proper audit follows a recognizable lifecycle. These are the steps, stated procedurally rather than as a checklist.

1. Notice and scope: Announce timing and purpose. Define the period, the subject, and what is in and out of scope.
2. Preparation: Give the audited team time to assemble records and identify points of contact. Expect follow‑up.
3. Fieldwork: Be courteous and thorough. Leave no stone unturned. Ask the people who do the work. Trace samples to source.
4. Discrepancy list (not findings): Record exceptions neutrally. A discrepancy is an observed variance from a standard, not a verdict.
5. Reconciliation with substantiation: Invite explanations and supporting records to show why a discrepancy is not problematic or is justifiable.
6. Follow‑ups: Where explanations raise new questions, continue the inquiry calmly and specifically.
7. Preliminary findings: Draft conclusions that others can retrace from evidence. Keep them tied to scope and period.
8. Remediation plan and closure: Work with management to propose reasonable, complete remedies that address every issue. Track remediation to completion, verify evidence of closure, and, where severe impropriety or ongoing non‑compliance exists, recommend sanctions.

The Reality: Painful but Clarifying

Even when respectful, a proper audit is painful, grueling, and draining. You relive decisions. You expose weak spots. You answer the same question from three perspectives to be sure the record holds. But at the end, the result is clear and understandable. That is the trade: discomfort for clarity.

Clarity and integrity are the point.

For the inverse case—and why skipping notice, scope, and reconciliation turns into something else—see What a less‑than‑proper audit looks like.