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#2233544 - 03/23/20 11:28 PM CIP - what are your auditors asking for?
DingoJ Offline
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Joined: Sep 2012
Posts: 72
I was wondering how auditors are requesting CIP documentation from other FIs.

We are in the process of overhauling our CIP process as our old system was very paper intensive and included extra steps that didn't add value or help validate someone’s identity. We have developed an automatic report that creates a "CIP record" for each new customer added to an account. The CIP record contains the customer name, SSN, DOB, physical address, a few other "good to know" things, and a list of account numbers the person was added to on that day.

Even though our process is, for the most part, automated, we do still have to manually type information in "keyword" fields used by our retention system so we can search for and retrieve the records at a later date. Obviously I want to keep the manual part of this process to a minimum, for efficient sake and to minimize the possibilities of errors.
Currently we are keying in the name and SSN for each customer. Not having to key in the account number the person was added to, while a seemingly small step, saves quite a bit of time and keystrokes from someone’s overall day.

I’ve been told, however, that when auditors ask us for our CIP information, they say “show us a CIP record for each person added to account 123”. Etc.

But I wonder if the way they ask for CIP information is based on how we provide the initial information to them, such that if we supply them with new accounts opened recently they then ask to see all the new customers added to those accounts. Whereas if we were to supply them with a list of new customers, would they then simply ask for the CIP information from those customers? And remember that when the CIP record is viewed, it shows all the accounts the person was added to, it simply isn’t a field that is used to locate the record within our retention system.

Sorry for the mess of a question - just trying to understand if what we are encountering is self-inflicted or the norm.

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#2233548 - 03/24/20 01:03 PM Re: CIP - what are your auditors asking for? DingoJ
rlcarey Offline
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As long as you are able to retrieve it, I am not sure what difference it makes.

"The CIP record contains the customer name, SSN, DOB, physical address, a few other "good to know" things, and a list of account numbers the person was added to on that day."

What about identification used and any non-documentary methods employed??
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#2233558 - 03/24/20 03:54 PM Re: CIP - what are your auditors asking for? rlcarey
DingoJ Offline
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Joined: Sep 2012
Posts: 72
Yes, the identifications used including issue and expiration dates and non-documentary are included. I just was focused more on how people were being asked for the records and didn't want to muddle up the waters with the specifics of the record itself.

> "As long as you are able to retrieve it, I am not sure what difference it makes."

Exactly, however I was hoping to see how auditors are asking others for these records. My dilemma is trying to keep the initial process simple, yet not cause too much extra work for the department that has to pull records for audits.

When being audited for CIP compliance, do others encounter requests such as:
1) Provide CIP information for new customers added to accounts during x period of time
Or
2) Provide CIP information for this list of accounts that were opened during x period of time

How others are being asked could help me sway my team to a process that is more efficient.

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#2233561 - 03/24/20 04:05 PM Re: CIP - what are your auditors asking for? DingoJ
#12 Offline
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As an external auditor, I've done it both ways, depending on how the client handles their CIP process.

I always ask for a list of new customers during x period of time. From there, communication with the client bank will determine how the information I ultimately need will be provided to me.

Hope that helps!
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#2233562 - 03/24/20 04:08 PM Re: CIP - what are your auditors asking for? DingoJ
BrianC Offline
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Joined: Nov 2004
Posts: 6,240
Illinois
My ideal sample list is a report from your core that has the following fields:

Customer Name, Customer Date (e.g. the date the customer record was created), Account Number, Account open date, Account Type

If I get this into Excel, I can sort by account open date and customer date. If I see a new customer date and an account open date that are the same or very close together, then I know it is an account for a new customer. If I see a new customer date that is current and an account open date that is old, then I know it is a new customer that was added to an existing account. This also allows me to filter by account type so I can get all business lines (deposits, loans, safe deposit box, etc.) Some clients have customers on other systems (e.g. trust department) so I may have multiple lists to select samples.

If I only receive a "new account report" I often struggle to pick accounts not opened by existing customers.

If I only receive a "new customer report" I often end up with persons who are only named as beneficiaries.

Your core may not have my ideal report, but most cores do have report writing software that allows you to customize the fields so accommodate your auditor's specific request.
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#2233581 - 03/24/20 06:15 PM Re: CIP - what are your auditors asking for? DingoJ
John Burnett Online
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Banks often change audit engagements periodically, so it's more often the auditor who has to adapt an approach to the client's practices than the client changing things up solely for the auditor's preferences (except to address true audit exceptions, of course). And an auditor with a varied client base of banks and credit unions of different sizes offering different kinds of accounts and services has to be flexible just to be successful.
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#2233582 - 03/24/20 06:25 PM Re: CIP - what are your auditors asking for? DingoJ
BrianC Offline
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BrianC
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Illinois
No question, John. I ask for what I outlined above, and if a client says, "My core can't provide the information in that format," my next question is, "What can you give me?"

Our professional standards require that we send a request list four weeks prior to an engagement and then follow-up with a phone call prior to the start of the engagement to discuss logistics. This allows for give and take on these types of issues so that my consultants know what they well be seeing on Monday morning. That's not the time to find out that the bank is struggling with how to produce material.
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#2233593 - 03/24/20 07:06 PM Re: CIP - what are your auditors asking for? DingoJ
DingoJ Offline
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Joined: Sep 2012
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This is all very helpful. My impression from what I have heard from auditors in the past was that they ask for information based off how we tell them we can provide that information. Of course, we need to be able to provide the information in such a way as to allow for an accurate and comprehensive review.

This is exactly the kind of information I was looking for. I really appreciate everyones input and responses.

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