Monitoring and reviewing your business contribute to the continuous improvement of your internal systems and controls. It aims to check that your control environment is sound, has been effectively implemented and identifies areas for improvement. In addition, through early detection of ‘red-flags’ monitoring can identify potential issues before they become potential breaches.
As an external consultancy Effecta can provide you with an independent review within the framework of industry best practice and regulatory expectations. During the monitoring process we will draw on a wide range of sources including meeting employees, reviewing documentation, testing internal systems and controls and reviewing internal and/or external audits of the relevant business area. Senior management will then be able to review the findings and provide clarifications and management responses as well as allocating responsibility and deadlines for resolving any findings. The report should be provided as part of the MIS.
Monitoring can include an annual health check or a more frequent ongoing review including quarterly or even monthly depending on the nature and scale of your business.
Key elements of best practice
- Continuous improvement: Through monitoring the Compliance program, identify aspects which could be improved or where the process and procedures could be simplified to ensure that the programme is as effective and efficient as possible.
- Focus: Ensure close and regular monitoring of high-risk functions and transactions. As a safety control, use statistical sampling to select spot checks to avoid risks being overlooked.
- New technology: Use technology to manage the monitoring process, enable collaborative working, record data and information, provide a monitoring/audit trail and carry out automated data analysis to monitor for red flags.
- Independent review: Provide confidence in the Compliance program, as well as provide a different perspective on existing processes and procedures and where improvements can be made.
- Review by leadership: Report on results of monitoring to senior management and the Board and ensure that improvements are implemented where deficiencies have been identified.
EFFECTA’S Essential Insights: A Regulatory Update
February 16, 2023
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