Intro to Mortgage Origination Examinations Training - July 2025

Key Features

• Assurance Level: Limited • Procedures: Inquiries and analytical procedures • Reliance on Management Data: Partial (some cross-checking and trend analysis performed) • GAAP Compliance: Generally required; includes footnotes and cash flow statements • Use Cases: When stakeholders need more credibility than a compilation offers but not the rigor of an audit • Cost & Time: Moderate in both cost and time commitment

Audit

Definition A financial statement that has been audited and represents all components of a financial statement including balance sheet, cash flow statement and income statement. For NMLS purposes, this is also referred to as an audited financial statement. An audit is the most rigorous and comprehensive level of financial statement service, resulting in an opinion on whether the financial statements are presented fairly and in accordance with the applicable financial reporting framework (e.g., GAAP). Key Features • Assurance Level: Reasonable (highest level of assurance) • Procedures: Substantive testing, confirmation with third parties, physical inspections, and internal control evaluation • Reliance on Management Data: Limited; verified through independent testing • GAAP Compliance: Required, with complete disclosures and adherence • Use Cases: Required by regulators, lenders, or investors; ideal for public companies or organizations seeking the highest level of financial credibility • Cost & Time: Highest cost; most time-intensive (may take weeks or months)

4 Understanding CPA Audit Report Types / Definitions & Key Features