Internal audit: Raising the bar in auditing financial crime risk

Samar Pratt and Erika Peters

Journal of Financial Compliance, 2017, vol. 1, issue 3, 237-244

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 (search for similar items in EconPapers)
JEL-codes: E5 G2 K2 (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:aza:jfc000:y:2017:v:1:i:3:p:237-244

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