My brokers have been audited and passed with flying colors.  Audits happen quite often in my market.

Peter Mohylsky, Beach Expert,

I heard of an agent being audited about ten years ago twice. Another agent here in the rain mentioned to me that they are starting to audit here in Florida. They will come unannounced at your office which makes no sense. I do not believe I would let a person unannounced check my records.

30+ years as a mortgage broker, 10+ as a Realtor and never audited. I'm sure that will change now that I posted this. :)

In Maryland you need to keep records for 7 years. The Real Estate Commission can also spot check to make sure the EMD account is in order and they do show up and will pull random files to check.

Knock on wood. No Department of Real Estate audit for me in over twenty years. Since I am not a broker, I think the only reason for me to be subject to an audit would be if there was a complaint filed against me.

My personal records have not been audited. I have no idea if they've audited the records of any brokerages I've been associated with. A lot of the audits have to do with trust accounts. And  from what I hear there are plenty of problems at many brokerages, such intermingling of funds.

YEP in 2018 they swept ALL the brokers, it was done electronically . . . 
It was a 2 month process in several steps and very nervewracking . . . I wrote a post about it back then. 
WHY do we have to retain files for multiple years (5 after COE in AZ)?
BC consumers have 5 years to file a complaint. 

I think those companies that keep Earnest Money and Security Deposits (like property managers) are most subject to audit. I have never heard of an individual agent being audited by the state. That would be the IRS's job.

Yes we (brokers) must keep records for 5 years.  I was audited once and all was perfect as I knew it would be.  I don't do property management but they were auditing some smaller residential companies that year.  I won their lottery! LOL

California: "All records of an agent’s activities on behalf of a client during the listing period are retained by the agent’s broker for three years." [Calif. Business and Professions Code §10148]

"The three-year period for retaining the buyer’s or seller’s activity file for review by the Department of Real Estate (DRE) begins to run on the closing date of a sale or from the date of the listing if a sale does not occur.  Upon notice, the records will be made available for inspection by the Commissioner of Real Estate or their representative, or for an audit the Commissioner may order." [Bus & P C §10148]

20+ years and counting, I have not been audited. 

I've never been audited, or sued.  However, the rule is there in all states, I presume, so if one is sued, the Statute of Frauds/Statute of Limitations may still be in effect.  A liable (or guilty) party could just say they no longer have the record of the written contract.  If the Commissioner (law) makes one retain records, and they no longer have them, at least they can be kept liable for not retaining records and therefore could lose their license for that.  A lot of loan agents were seemingly having their records lost during the downturn and the penalty for not retaining records was a heck of a lot less severe than finding fraud on the origination and facing prison! 

When I started my own business in 2009, the RE Commission said they would come out in 6 months, and knock on wood, still haven't ever been audited.   I invited them out, and wanted to be sure I was doing everything correctly.   For the most part, only title companies hold the earnest money, and they are most interested in how the dollars are being handled.

Never had the issue you described. All I know is how back-logged they were in processing. I bet this is yet another business not being run right

I believe that they are audited nearly every year.

Being a Broker-in-Charge here in the Charlotte area, we hear about these audits. Thankfully, those I am (and have been) associated with have passed with no issues whatsoever. 

It's been my experience that if you toe-the-line and ALWAYS do the right thing, you won't have any problems with audits.

I haven't but wouldn't want to be caught without what's required.

When I was a managing broker in Florida in the 1990's my office was audited. The big issue at the time was agency disclosure acknowledgment forms and proper sizing of the registered broker's name on the front door. As we moved into the 2000's no. The keeping of records is to preserver evidence for possible litigation.

Hi Peter Mohylsky, Beach Expert 

  Twice.   Audited by DBPR.   

  The first time was in mid 1990's.  It took about 10 minutes. 

  Second time was three years ago.  The DBPR was training new people... FOUR of them were in my office at 8:00AM on Monday morning (yes, I had been notified in advance). 

   I don't hold deposits (no escrow account); so that was easy.  AGENCY was a big deal for them.. I showed the forms for Single Agent, I am well versed in "presumption of Transaction Brokerage", so again no issues.  Then they went through several listing agreements and sales contracts (I had prepared a pile of paper copies for them).  The head guy, who was training the newbies, pointed out the correct initials on every page, proper signatures, etc. 

    I passed the whole thing.  (I framed the signed inspection report and have it on my office wall under my license!).

  That same week, one of the biggest offices in Tallahassee was hit hard, very hard.  The manager, the broker, and a couple of agents got reprimands and fines.  

I haven't heard that happening in MA but it's a good idea to maintain records. I keep mine for 10 years

When I first began in this biz, we were told we were supposed to keep records for 7 years.  I did so religiously for quite a while, and I asked a veteran in my office how she handled it (because, quite honestly, it was just. huge amount of work, and I wondered if she had an easier way to do it).

She told me that she'd been in the business for almost 30 years, now, and she'd never kept any records at all, and she'd never been audited.

Fred Griffin Florida Real Estate posted about a random audit that he had done. 

Audit - have you or your broker been audited by your state real estate commission or licensing agency - what do they want to see - did you have that information ready

I'm confused now since a couple Florida folks posted that Florida does not show up unannounced and will send a letter to set a time and date for the audit. But Fred's audit was random so...which is it?

Also, last summer FR posted an article about Florida license law and in it specifically stated as follows (emphasis added)

Inspections

The Department of Business and Professional Regulation (DBPR), its employees and/or agents have the power to inspect and audit any broker or brokerage office in a lawful manner at all reasonable hours. Further, the DBPR can inspect a broker’s books, accounts and records to determine whether he/she is complying with regulations. (Sections 475.5015 and 475.5016, Florida Statutes)

Fred Griffin - Can you clarify this?

No, thankfully.

Once, I had to submit proof of my CE classes.