The Audit Process

NFA conducts periodic on-site audits of its Member firms. The audits are meant to support your firm's commitment to meet its regulatory obligations. During an audit of your firm, NFA auditors will communicate with your firm throughout the audit process. It is important for your firm to maintain accurate information in your firm's Annual Questionnaire. NFA requires that you complete the Annual Questionnaire every 12 months. However, if your customer base or business significantly changes more frequently, we encourage you to update the information accordingly.

Listen to NFA's podcast "Preparing for an NFA Audit" to learn more about the audit process and some tips for how to prepare an NFA audit. NFA announces nearly all of its audits. During audits, you'll encounter a lot of questions as our auditors are ensuring that they are clear in understanding your firm's operations.

How to make the audit process faster for you and your firm:

• NFA auditors will send your firm a document request list when they are preparing to audit your firm. The document request list will show what documents the NFA auditors will require for their review upon arrival. If you have any questions about the documents requested by the audit team, we encourage you to contact your auditors in advance.
• NFA auditors will look at your cash records (bank statements, cancelled checks, check registers, wire advices, and deposit slips). Maintaining these documents in a central location for all accounts, not just the operating account, helps the audit process.
• CPOs and CTAs should have their performance-related spreadsheets and calculations available for NFA auditors, as well as the person who prepares these for your firm.
• Independent Introducing Brokers should maintain a general ledger, balance sheet, net capital computation and all supporting documents as of each month end and have available for review.

Tip: If you use third party service providers and will need their assistance to answer the auditors' questions, make arrangements to have the service providers available during fieldwork for conference calls.

Educational Audit

New Members may request an educational audit or visit by NFA, voluntarily and free of charge. If an educatonal audit is conducted on your firm, the following areas will be reviewed:

• All registration categories: procedures, contact information, registration of personnel, promotional materials
• Introducing Brokers: financials, anti-money laundering procedures
• Commodity Pool Operators: account statements, customer recordkeeping, disclosure documents
• Commodity Trading Advisors: customer recordkeeping, disclosure documents