CAE Agenda: Your Monthly Audit News Roundup - August 2021



Our team has collected the top internal audit news, insights and resources for financial services organizations to help you and your teams.

Thank you for reading the August edition of the CAE Agenda.

The Protiviti Team

Internal Auditing Around the World, Volume 17

Amid Chaos and Uncertainty, Internal Audit Stands as a Beacon of Resilience

For this edition of Internal Auditing Around the World®, we thought it appropriate to focus on the topic of resilience, given everything internal audit teams and their companies have been through lately. More specifically, we asked chief audit executives (CAEs) and their colleagues: “What is internal audit’s role in business resilience?” To summarize their responses: It’s pivotal.
The organizations profiled in the 2021 edition of the study represent a cross-section of countries and industries and include, Centene Corporation, DBS Bank Ltd, FIS Global, Global Foundries, Grupo Bepensa, Inchcape, Knowles Corporation, Masonite, Saudi Telecom Company, Standard Chartered, TrueBlue and others.
Internal Auditing around world icon


IIA Calls on Accounting Standards Foundation for Reliable Sustainability Reporting

On July 28, The Institute of Internal Auditors called on the international accounting standards IFRS Foundation for enhancements to sustainability reporting. The IIA also offered to play a role on a consultative committee being assembled through the International Organization of Securities Commissions (IOSCO), the international body that brings together the world's securities regulators and is recognized as the global standard-setter for the securities sector.

Read Statement

Regulating Big Techs in Finance

In this BIS Bulletin published on August 2, the authors argue that a new, more tailored approach to regulation is needed as Big Tech’s rapid growth in financial services poses new challenges for regulators.

Read Bulletin

Public Responses to Consultation on Targets for Addressing the Four Challenges of Cross-Border Payments

On 31 May 2021, the FSB published Targets for Addressing the Four Challenges of Cross-Border Payments: Consultative document. Interested parties were invited to provide written comments by 6 July 2021. The FSB has now shared the public comments and expects to publish the final targets in October 2021.

Read Public Responses

Replacing the World’s Most Important Number

Despite all that is at stake, the LIBOR transition has not made headlines this year because regulators and legislators at the state, federal and international level have anticipated issues with the transition and are working swiftly to address them. Banks, consumers and regulators hope that the LIBOR transition remains smooth and uneventful.

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Credit Suisse Failed to Act on Archegos Risks, Report Says

On July 29, Credit Suisse Group published the findings of an internal investigation about the bank’s handling of its exposure to Archegos Capital Management, which collapsed in March causing about $10 billion of losses for several banks. Credit Suisse, which was the worst hit among peers, said in response to the findings it was cutting its overall risk appetite, adjusting governance procedures and increasing risk management staff.

Read Article

U.S. SEC Chair Gensler Calls on Congress to Help Rein in Crypto 'Wild West'

On August 3, the chair of the U.S. Securities and Exchange Commission (SEC) called on Congress to give the agency more authority to better police cryptocurrency trading, lending and platforms, a "Wild West" he said is riddled with fraud and investor risk.

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Acting Comptroller of the Currency Testifies on Regulatory Priorities

On August 3, Acting Comptroller of the Currency Michael J. Hsu testified at a hearing before the U.S. Senate Committee on Banking, Housing and Urban Affairs. The acting comptroller’s testimony discussed the agency’s priorities, review of key regulatory standards, and efforts to promote fairness and inclusion in the federal banking system. Hsu’s testimony also discussed issues unique to community banks.

Read Written Testimony

Reining in Cyber Risk

Recent high-profile hacks and other IT security disasters should remind internal audit to widen its focus away from just the technology to other equally dangerous aspects of cybersecurity risk, such as policy noncompliance among employees or lack of third-party cyber resiliency. They should also be a reminder of vulnerabilities that could appear anywhere in the organization and the importance of collaborative effort. Internal audit can help bind together different parts of the enterprise to form a unified front against cyber threats and help keep the organization protected from would-be attackers.

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EU Banking System Remains Resilient in Face of Harshest Ever Stress Test

Following the publication of the results of the EBA’s 2021 stress test, Michael Lever, head of prudential regulation at the Association for Financial Markets in Europe (AFME), said: “AFME is pleased to note that the European banking system remains well capitalised even after taking account of the impact from extremely harsh assumptions which formed the basis of the test.”

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FCA Consults on Proposals to Boost Disclosure of Diversity on Listed Company Boards and Executive Committees

The FCA has launched a consultation on proposals to improve transparency for investors on the diversity of listed company boards and their executive management teams. The FCA is consulting for 12 weeks on these proposals, with a closing date of 22 October 2021. Subject to consultation feedback and FCA board approval, it will seek to make relevant rules by late 2021.

Read Consultation

A Conversation About Female Empowerment, the Need for an Inclusive Recovery and Transatlantic Cooperation

How can we foster the economic empowerment of women after the coronavirus crisis? And what role does transatlantic cooperation play in shaping a more inclusive recovery? Listen to ECB President Christine Lagarde, EU Commission President Ursula von der Leyen and U.S. Secretary of the Treasury Janet Yellen talk about this and more in the latest episode of the ECB Podcast, hosted by Katie Ranger.

Listen to Podcast

BIS Innovation Hub and Monetary Authority of Singapore publish proposal for enhancing global real-time retail payments network connectivity

On July 28, the Bank for International Settlements Innovation Hub Singapore Centre and the Monetary Authority of Singapore (MAS) published a proposed blueprint for enhancing global payments network connectivity via multilateral linkages of countries’ national retail payment systems.

Read Blueprint

Japan Banks to Deploy Shared System for AML/CFT Monitoring

Japanese banks are working to implement a new shared platform for AML/CFT monitoring and screening to address the issue of false positives in the banking industry. According to Hiroshi Ozaki, director of the AML/CFT Policy Office of Japan’s FSA (Financial Services Agency), the new system has proven to be successful at enhancing the effectiveness and efficiency of AML/CFT monitoring and detection.

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Cyber Risk Readiness, Response & Ransom: An Audit Committee Perspective

Cyber risk is the number one current issue of concern for most ARCs. The purpose of this white paper, published on July 22 by The IIA Australia, is to assist and prompt thinking and questioning by audit and risk committees (ARCs) on emerging issues in cyber risk.

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Proposed U.S. Interagency Guidance on Third-Party Relationships: Leveling the Playing Field for Third-Party Risk Management Requirements

On July 13, 2021, the Federal Reserve Board (FRB), the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC) released a joint request for comment to their Proposed Interagency Guidance on Third-Party Relationships: Risk Management. The agencies have issued this proposed guidance in response to industry feedback requesting alignment among the agencies’ third-party risk management (TPRM) guidance. The deadline for comments to be submitted is September 17, 2021.
In this Flash Report, we summarize the opportunities for comment from the industry to seek additional clarity and share key takeaways around TPRM life cycle considerations, data and infrastructure, and program governance that banks can act upon now to address the key considerations and any gaps in their TPRM programs.

Extraterritorial: The AML Act of 2020 Drastically Expands the Give-and-Take of Global Information Sharing

The Anti-Money Laundering (AML) Act of 2020, passed by the United States Congress on January 1, 2021, included two important provisions related to expectations for extraterritorial information sharing, which represent an expansion in policies around movement of AML records into and out of the United States. International organizations should begin to plan for what they will do if they or any of their correspondent banks are issued a subpoena. Additionally, institutions should continue to monitor for updates from the U.S. Treasury regarding the SAR-sharing pilot program.

Research Shows High Digital Maturity Can Be a Critical Driver for Next-Gen Audit

What defines a digital leader in internal audit? What are some distinguishing characteristics of such a function? Our recent report The Next-Generation Internal Audit Journey Needs to Begin Now show that most organizations are still in the early stages of their next-generation audit journeys. Read our latest blog to understand how to increase maturity and resilience through building an action plan.



Resilience Practices Can Help Firms Mitigate Supply Chain and Third-Party Provider Risks

The scale and frequency of recent disruptive events have exposed the fragility of supply chains. These incidents call for broad implementation of operational resilience practices and detailed and continuous monitoring of suppliers — third, fourth and fifth parties that deliver important business services or processes — as well as concentration risks. In this paper, we summarize eight practical actions companies should consider taking now.


Read Paper


CFO Insights: Preparing for What's Next

Protiviti’s latest newsletter, CFO Insights, summarizes the latest news, blogs, articles and webinars curated specially for the finance audience.


Read July Edition



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