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ControlsAdvanced10 min

Exceptions, maker-checker and audit evidence

Use a consistent control approach for critical fields, overrides, failed validations and operational corrections.

Purpose

Apply a disciplined response to exceptions without bypassing ownership, evidence or independent review.

Before you begin

Prerequisites

  • Institutional procedures and authority matrix
  • Clear source evidence for the intended result
  • Understanding of the transaction’s cash and position impact

Operational sequence

Workflow and validations

01

Identify and contain

Understand the failed validation or incorrect result before further activity occurs.

Control check: Duplicate processing and uncontrolled cash release are prevented.
02

Classify the issue

Determine whether the cause is instruction, setup, timing, reference data, calculation or user input.

Control check: The proposed response addresses the cause, not only the symptom.
03

Evidence the intended state

Gather documents, approvals, calculations and position data showing the correct outcome.

Control check: Another reviewer can reproduce the conclusion.
04

Approve and correct

Use the authorized correction, override or escalation path.

Control check: Maker and checker are independent where policy requires.
05

Reconcile and close

Confirm every affected position, cash entry, accrual and downstream feed is corrected.

Control check: Closure notes record cause, action, approver and final evidence.

Troubleshooting

Common breaks and response

An override resolves the screen error but reporting remains wrong

Likely cause

The override treated the symptom without correcting underlying setup or downstream records.

Controlled response

Reopen the issue, assess full impact and reconcile all connected outputs.

A checker cannot reproduce the maker’s conclusion

Likely cause

Source evidence, calculation logic or explanation is incomplete.

Controlled response

Return the item for complete evidence rather than approving from verbal context.

The same exception repeats

Likely cause

Root cause, procedure or reference data was not corrected.

Controlled response

Raise a problem-management action and track preventive remediation.

Connected impact

Downstream effects

  • Cash and accounting integrity
  • Position and exposure reporting
  • Customer communication
  • Audit and regulatory evidence
  • Operational risk reporting

Control record

Audit evidence

  • Original instruction and error state
  • Impact assessment
  • Independent calculation
  • Maker-checker approval
  • Final reconciliation and root-cause note

Practical context

Scenario: incorrect value date discovered after booking

The team stops related processing, assesses cash and accrual impact, documents the correct date from source evidence, obtains independent approval, uses the authorized correction path and reconciles every affected output.

Knowledge check

Check your understanding

When is an exception truly closed?Show answer
Only when the intended result is restored, all downstream impacts are reconciled, approvals and evidence are complete, and any recurring root cause has an owner.

Next guide

Deal, facility and outstanding hierarchy

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