Are scheduled inspections a bad thing?

“Wells Branches Alerted on Monitors,” The Wall Street Journal, January 25, 2017 B2. Branches of Wells Fargo were notified 24 hours in advance of regular compliance inspections.  Bank has since supplemented regular inspections (that have at least 24 hours’ notice) with surprise compliance inspections.

I’m all in favor of the occasional surprise inspection as a compliance tool, but I’m not sure that regular inspections, with notice, are a bad thing.  Don’t we normally get prior notice of an audit?  Or of visits by auditors?

I’d be more troubled by the reports of the flurry of activity after notice was received.  Why weren’t things being done in a compliant manner to begin with?

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Filed under Controls, Governance, Internal controls, Oversight

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