Compliance strategy is about adhering to the rules laid down by Regulatory as well as by other related authorities including Government and mitigating the prevalent risks. Internal policies and mandates arising from new business development technologies, risk trends, eTHIC considerations and line-of-defence coordination are also creating the need for enhancement in the Compliance.
A compliance audit is a evaluation to ascertain the level of adherence to regulatory and other guidelines and non compliance by an organisation. It helps the organisation in avoiding the adverse observations by the Regulator and other agencies, penalties & legal suits which may result in financial loss to the organisation. Compliance Audit reports provides the strength, weakness and comprehensiveness of an organization’s compliance adherence to enable it to take necessary corrective actions to minimise the risk.
Compliance Audit will also bring out the false compliance provided either intentionally or unintentionally. False compliance is treated as critical because it degrades the ethic, integrity and trust of the organisation. In addition, the organisation would have initiated further actions based on the false compliance provided which will also be incorrect. In view of its criticality of false compliance, the accountability extends to penalties and disciplinary action for the concerned individual.
Ways to improve the compliance audit process:
- Identify the applicable compliance areas and areas to be covered under Compliance Audit Scope.
- Prioritise the areas with areas having higher risk at the top
- Collate comprehensively the relevant laws, provisions rules and guidelines
- All relevant internal Policies and procedures are to be taken into consideration to make it comprehensive
Having an effective Compliance Audit Process will enhance the adherence and reduce the Risks to the minimum level. Comprehensive Tech solution for Compliance Audit will enable the organisation to collate the relevant provision, assess the status of compliance level, to initiate necessary preventive and corrective actions thereby improving its compliance level.
A veteran banker with over 38 years of banking experience in India’s largest bank, SBI – Muralidharan (BMD) is a graduate with CISA and various banking related certifications. With his constant zeal for improvements and knowledge, BMD has been instrumental in Audit Policy & Design, Audit Process Restructuring and Audit Automation. He is a pioneer in IT Risk including Information Security, IT Compliance, Core Banking and Data Management. Having retired from SBI as a Top Executive, BMD is currently providing active support to NCS Soft in product development, offsite audit and other new initiatives.