A compliance audit is an independent investigation into whether a company is following these legal or regulatory standards through an analysis of its policies, processes, procedures, documentation, systems and files to ascertain if the company is acting within the regulations set for its industry.
For Financial Services firms, audits have always been an important part of ensuring regulatory compliance. With the increase in FCA scrutiny, and in particular the increasing number of Skilled Person Reviews (Section 166s) within Payments and E-Money, audits are one of the essential tools firms have to ensure their compliance and regulatory operations are up to scratch and to limit their risk from potential scrutiny.
Due diligence requests from regulated business partners and third parties are also increasing as the FCA’s more assertive approach ripples through the industry.
Independent Internal Audits
Independent internal audits are commissioned by the business itself to highlight potential gaps with its current framework enabling it to take remedial action before the gaps are identified by the regulator or another third party. The auditor will produce a written report of its findings highlighting these gaps.
At Neopay, we rank these gaps based on the risk they pose to your business and provide recommendations for remedial actions. We will take time to ensure that you and your colleagues understand the findings and the options available to rectify any issues.
Audit Scope
Every audit is different; the needs and concerns of the business dictate the breadth and scrutiny needed.
Some firms prefer to undergo annual or bi-annual audits that cover all of their regulatory compliance and AML operations. Others prefer to use audits targeted on specific areas of concern, priorities of the regulator or to check their implementation of recent changes to regulation and guidance. Our consultants can help you identify the appropriate audit scope to meet your business priorities.
As well as individual audits, we also offer rolling audit contracts through one of our VCS modules. This allows firms to take a practical, phased approach to reviewing their compliance whilst spreading the cost over the course of a year. It also ensures that targeted audits are focussed on the areas of highest risk for their business.
The Benefits of Regular Audits
The right audit will not only reduce your risk of FCA scrutiny, enforcement action and penalties, but also increase the effectiveness of your compliance, raising profitability.
Your consultants should not only highlight gaps and suggest remedial actions, but they should also make you aware of the priorities and risks associated with any gaps.
With the increase in new FCA guidance and requirements, as well as their change in approach, it is vital that firms ensure their compliance frameworks and processes are keeping up to date. Regular audits are more important than ever.
At Neopay, using our experience of the FCA’s more assertive approach, we’ve developed a range of solutions tailored to firms needs as they adjust to the changing attitude of the Regulator. Contact us today to gain a better understanding of how we can help you.
