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Internal audit: Raising the bar in auditing financial crime risk
Journal of Financial Compliance,
1
(3),
237-244
(2017)
Abstract
Internal audit has a crucial role to play in financial institutions to mitigate financial crime risk sustainably. In the context of tightening financial crime regulatory requirements and in a constantly evolving risk landscape, this paper will provide nine best practice steps internal audit can follow to ensure it has the right skills and experience to help the business achieve sustainable compliance and minimise the risk of regulatory fines. The paper will explore how the third line of defence can test controls and detect poor risk management outcomes using risk-based sample testing, computer-assisted audit techniques and data analytics. The reader will see how these methods, if used correctly by skilled auditors, can help a financial institution pinpoint the latent financial crime risk within its book and determine whether the institution has achieved desired risk management outcomes.
Keywords: internal audit; skills; resources; technology; outcome-based auditing; data analytics; anti-money laundering (AML); sanctions; financial crime
The full article is available to subscribers to the journal.
Author's Biography
Samar Pratt is a managing director who leads Exiger’s financial crime compliance audit and assurance practice. She is engaged on a significant Department of Justice banking monitorship and works with clients worldwide to enhance their financial crime compliance programmes. Her work brings her into regular contact with the Department of Justice and regulators around the world including the Federal Reserve and the Financial Conduct Authority. Samar has over two decades’ experience in banking in various leadership roles in audit and financial crime compliance in the banking sector.
Erika Peters is a director based in Exiger’s New York office, where she focuses on the firm’s financial crime compliance and assurance practices. She is one of Exiger’s leaders working to enhance Exiger’s clients’ financial crime compliance programmes and provide audit and assurance services. She is engaged on a significant Department of Justice banking monitorship, reporting to the Department of Justice, Federal Reserve and Financial Conduct Authority. She works with regulators around the world, leading teams in reviewing anti-money laundering (AML) and sanctions compliance programmes within the first, second and third lines of defence. Erika is a banking specialist and has held various leadership roles in audit and financial crime compliance within several large financial institutions.
