For many financial sector companies, internal audit is a mandatory requirement. In addition to credit institutions and insurance companies, internal audit is also mandatory for:

Credit providers and credit intermediaries;

  • Payment institutions and electronic money institutions;
  • Investment fund managers.
  • Information about the internal auditor must be submitted as part of the application for an operating licence from the financial supervisory authority.
  • The operation and procedures of the internal audit function must also be documented in the organisation’s internal policies and procedures.

As internal auditors must not perform duties that create or could potentially create conflicts of interest, it is not possible to establish a position in which a single employee simultaneously performs the internal audit function and makes management decisions in other areas of the organisation’s operations. Consequently, companies essentially have two options: employ an in-house internal auditor or outsource the internal audit function to an external service provider.

The key areas of internal audit in the financial sector include:

  • Creditworthiness assessment: Compliance, practical implementation and effectiveness of creditworthiness assessment procedures;
  • Anti-money laundering and counter-terrorist financing: Compliance of anti-money laundering (AML), counter-terrorist financing (CTF), counter-proliferation financing and Know Your Customer (KYC) procedures with applicable laws, regulations and guidelines, as well as their practical implementation and effectiveness, including the assessment of customer due diligence measures, risk assessments and risk appetite;
  • Financial services processes: Audits of other processes related to lending, credit intermediation, investment fund management and the provision of payment services;
  • Information security and data protection: Audits of information security and personal data protection;
  • Financial services advertising: Audits of compliance with regulatory requirements governing financial services advertising;
  • Outsourcing and third-party reliance: Assessment of outsourcing arrangements and reliance on third parties;
  • Human resources and remuneration: Audits of human resources management and remuneration systems.

As internal auditors, we can also provide advisory services on organisational risk assessments, documenting the internal audit function in internal policies and procedures, and other related matters.