The AML Code, Rule Book and Corporate Governance Codes all require the board to satisfy itself that the company complies with its internal policies and procedures as well as its legal and regulatory obligations.
The mechanisms employed by organisations to assess and monitor compliance systems and controls vary according to the size and complexity of the business. Some firms utilise the resources of group internal audit, others may request that employees independent of first and second lines of defence undertake a review and some firms rely on self review mechanisms.
Whilst internal audit offers an independent and impartial review of the firms systems of compliance, reliance on group audit programmes whilst satisfying group obligations may not provide the assurance required locally due to differing risk appetites and materiality levels adopted at a group level.
In house review mechanisms may not always provide the required level of impartial expertise required, especially when deep dives into areas of concern are needed. One solution may be to seek an independent external review of a firms systems of compliance conducted under specific terms of reference.
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