The letter is polite. It names an exchange — NYSE, Nasdaq, Cboe, CME, ICE — or an audit firm working on its behalf, cites the audit clause in your subscriber agreement, and asks for usage records, entitlement reports, and system documentation. Near the end it proposes a kickoff call.
What you do in the first two weeks matters more than most firms realize. Remote-first audits now stretch from months to years. Lookbacks of five-plus years are standard in major exchange programs, and under-reporting adjustments commonly carry interest at 1.5% per month under exchange addenda. The pattern you set at the start is the pattern the audit keeps.
1. Read the audit clause before the questionnaire.
The audit exists under a contract, and the contract defines its boundaries: scope, notice, record formats, cost allocation. Answer the questionnaire first and you have accepted the auditor’s framing of all four. Read the clause first — with its amendments and the current fee schedule — and you know what is actually owed, and what is not.
2. Appoint one point of contact.
Every auditor request and every response moves through a single controlled channel. Business units do not reply directly, however well-intentioned the answer. Audits widen on volunteered information more often than on discovered information.
3. Reconstruct the record before you describe anything.
Entitlement reports, provisioning and deprovisioning history, declared counts, contract versions. If you cannot reproduce historical entitlements, you are negotiating from weakness — the contract language usually assumes you can. Build the record first; describe your environment only from the record.
4. Answer what was asked.
Precision, not volume. Data handed over beyond the request expands the audit’s perimeter, and remote audits are easy to keep open. Every response should be complete on the question and silent beyond it.
5. Time-box it.
Propose a schedule at the kickoff call and manage the audit as a project: an evidence room, named decision rights, dates. Audits run as email threads drift; audits run as projects close.
Most audits end in a negotiated commercial settlement, not a dispute. The quality of your record — not the quality of your explanation — decides the number.
Firms that arrive with a current entitlement inventory and a documented data-flow map keep audits short and bounded. Firms that cannot produce them inherit the auditor’s assumptions, and the auditor does not assume in your favor.
The practitioners at Paraxis have defended 40+ exchange and vendor audits over the last decade, from both sides of the table. If the letter has arrived — or you want the file ready before it does — book a scoping call, or write to info@paraxisids.com and mark the subject line Audit.