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#1590609 - 08/11/11 02:09 PM Internal Auditor - Loan Officer
SUSANE1 Offline
Platinum Poster
Joined: Mar 2008
Posts: 808
we are a small bank. Several employees have many jobs. We have a small firm come in and conduct an internal audit and compliance audit (audit schedule covers 3 years) and then we have the big "official" external audit once a year. We have also had a women part time, calling her our "internal auditor" who audits various procedures and some compliance issues. She is leaving, so boss wants me to become the "part time internal auditor". I am a consumer loan officer. After the loan is approved, that is the end of my duties in the lending area. I am not involved in operations. Can I be a lending officer and the "part time internal auditor" or is this a conflict?

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#1590655 - 08/11/11 02:57 PM Re: Internal Auditor - Loan Officer SUSANE1
osucpa Offline
Diamond Poster
Joined: May 2011
Posts: 1,400
You raise many questions particularly since you are in a small bank. Please remember your outsourced internal audit and compliance function and external audit have a different purpose. Although, the external auditors must evaluate internal controls, they are issuing an opinion on your financial statements. With that being said, I believe you could perform some internal audit work namely in areas you do not work. I would approach your boss and offer the following recommendation. You could perform work in areas such as deposits, tellers and other areas and have the outsourced firm perform loan work.

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#1590661 - 08/11/11 03:03 PM Re: Internal Auditor - Loan Officer SUSANE1
Many Hats Offline
Platinum Poster
Joined: May 2008
Posts: 915
Orlando, FL
I feel your pain. Thus the reason why my name is Many Hats.

This is surprisingly common in small financial institutions. The trick to it is this: if they want you to continue producing, you should not be auditing loans that you originated. If you are a top producer, this can be a challenge. You should also not be auditing loans that you approved (in the event that you have such authority). So, depending on your situation, the bank may need to make a decision - do we want to lose her as a producer, or hire another auditor, or maybe just increase the frequency of the external audits you already have.

If they should decide that they want you to wear "Many Hats", I would consult with your existing external auditor to determine which types of things you would be okay to handle and which things they recommend you not handle - so that you do not run into any potential conflicts of interest. They should be able to give you some guidance on this.

Good luck! smile

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#1590664 - 08/11/11 03:04 PM Re: Internal Auditor - Loan Officer SUSANE1
Many Hats Offline
Platinum Poster
Joined: May 2008
Posts: 915
Orlando, FL
I feel your pain. Thus the reason why my name is Many Hats.

This is surprisingly common in small financial institutions. The trick to it is this: if they want you to continue producing, you should not be auditing loans that you originated. If you are a top producer, this can be a challenge. You should also not be auditing loans that you approved (in the event that you have such authority). So, depending on your situation, the bank may need to make a decision - do we want to lose her as a producer, or hire another auditor, or maybe just increase the frequency of the external audits you already have.

If they should decide that they want you to wear "Many Hats", I would consult with your existing external auditor to determine which types of things you would be okay to handle and which things they recommend you not handle - so that you do not run into any potential conflicts of interest. They should be able to give you some guidance on this.

Good luck! smile

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#1590668 - 08/11/11 03:06 PM Re: Internal Auditor - Loan Officer Many Hats
Many Hats Offline
Platinum Poster
Joined: May 2008
Posts: 915
Orlando, FL
LOL...technical difficulties...sorry for the multiple posts.

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#1591811 - 08/14/11 11:58 PM Re: Internal Auditor - Loan Officer Many Hats
Needs To Know Offline
Member
Needs To Know
Joined: Jun 2003
Posts: 80
Someplace Warm
We are also a small financial institution, but we have a compliance officer who conducts many of the internal 'reviews' and then we hire an internal audit to be completed by an outside firm. I guess my question would be, who are they hiring to replace the person leaving? Or are they asking you to double up on the work!

Our federal regulator once advised us we could use someone in the accounting department to do some of the work of an internal audit and they would be considered 'independent' of the work performed, as long as they were not auditing financial statements, etc.

So, I would agree that you can audit the operations side of things, but get the boss to agree to have the accounting department audit the loan side of things. And you could/should split the difference between your departments for the number of hours you both will have to put in for the hours required to do the work.

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