CAE Agenda: Your Monthly Audit News Roundup - November 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 November edition of the CAE Agenda.

The Protiviti Team

DoD proposes changes to cybersecurity compliance
Developments at and during COP26 the second week

DoD proposes changes to cybersecurity compliance?

On November 4, 2021, the U.S. Department of Defense published a proposed updates to its Cybersecurity Maturity Model Certification (CMMC) - CMMC 2.0. Learn about the program's improvements, what these revisions mean for your organization, and how your organization can strengthen its cybersecurity posture.


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Developments at and during COP26: The Second Week

The proceedings in the 12-day UN Climate Change Conference of the Parties (COP) in Glasgow have now concluded. This Flash Report summarizes developments during the second week and the agreements reached, and offers suggestions for companies to consider in the aftermath of the COP26 summit.


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New Report Examines the Future of Internal Audit Technology

The latest Global Knowledge Brief from The Institute of Internal Auditors, co-produced by Workiva, “Embracing the Future: How Technology Helps Audit Teams Stay Ahead of the Curve,” outlines how internal audit can benefit from pandemic-accelerated digital transformation. The report considers how internal audit can embrace the spirit of innovation and how agile methodology can improve the entire engagement process. The report also presents two case studies that detail how technology obstacles became opportunities for internal auditors during the prolonged pandemic.

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IFRS Foundation Announces Sustainability Board Go - Ahead

The International Financial Reporting Foundation (IFRS) has announced it is to coordinate a merger of the Value Reporting Foundation (VRF) – the host organization of the Sustainability Accounting Standards Board – together with the Climate Disclosure Standards Board (CDSB) to form a new International Sustainability Standards Board (ISSB).

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Gartner Executive Poll Finds More Are Worried About Ransomware Than Pandemic

According to Gartner's latest Emerging Risks Monitor Report, the "threat of new ransomware models” was the top concern facing executives in the third quarter of 2021, followed by post-pandemic talent drain, endemic COVID-19, supply chain disruptions and hybrid workforce disparities. The report reflects that the pandemic - related risks continue to linger as concerns related to talent, global supply chain disruptions, delays to returning to the office and implementation of vaccine mandates were all indicated as prominent risks by the polled senior executives.

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OFAC Puts Virtual Currency Industry on Notice

On October 15, the Office of Foreign Assets Control (OFAC) of the U.S. Department of the Treasury published "Sanctions Compliance Guidance for the Virtual Currency Industry" (the “Guidance”). The Guidance explains the purpose and use of sanctions for the uninitiated, details best practices for sanctions compliance by the virtual currency industry, and gives resources for further study. Treasury’s guidelines for virtual-currency companies are the latest move in the Biden administration’s effort to address risks posed by the respective emerging sector.

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U.S. Justice Department Toughens on Corporate Crime, Will Pursue More Individuals

On October 28, The U.S. Justice Department outlined significant new measures intended to minimize repeated corporate misconduct and prioritize prosecutions of individuals, signaling a shift to a tougher stance by the government toward white - collar crime. In this announcement, Deputy Attorney General Lisa Monaco specified three policy changes and identified future focus areas for corporate criminal enforcement, while stressing the importance of corporate compliance programs designed to prevent misconduct.

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Financial Regulators Clarify Key LIBOR Transition Considerations But Some Questions Remain

The federal financial institution regulatory agencies, in conjunction with the state bank and credit union regulators, issued a statement to emphasize the importance of an orderly transition away from LIBOR. Additionally, the statement includes clarification regarding new LIBOR contracts, considerations when assessing appropriateness of alternative reference rates, and expectations for fallback language.

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UK Likely to Adopt SOX - Style Reforms, Says FRC CEO

Speaking at a conference on reporting and governance, Sir Jon Thompson, head of the Financial Reporting Council (FRC), said, "The FRC’s view is that the introduction of a framework to assess internal controls would be very welcome with a U.K. version of Sarbanes-Oxley." The government is likely to finalize plans for its wide-ranging audit reforms by the end of year, with indications they will tighten up the rules on internal control and director accountability after carefully reviewing the associated administrative costs. Another issue raised at the conference was how to improve competition across audit firms to open up the business to non-Big Four audit firms.

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SMBs Would Rather Risk Customer Data Than Jeopardize Growth

A substantial number of small and medium-sized businesses (SMBs) in the U.K. would rather risk customer data than their own growth, despite a cybersecurity incident posing a significant threat, finds a report from As per the report, about one in four U.K. companies spend nothing on cybersecurity, and another one in four spend less than $1,300 a year, whereas more than 50% they are too small to be the target of a cyberattack or have no information hackers would deem interesting.

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U.K. Government Provides Outline of Reporting Program to Combat 'Greenwashing'

The U.K. government set out a broad program that will bring together and streamline existing climate reporting requirements for companies, investors, and investment products. HM Treasury said that 'Greening Finance: A Roadmap to Sustainable Investing' outlines the legislative and regulatory changes that will be made across the economy to provide better environmental impact information. The Sustainability Disclosure Requirements (SDR) will apply to companies, pension schemes, investment products, and asset managers and owners.

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MAS and NAIO Launch Program to Deepen Al Capabilities in Financial Services

The Monetary Authority of Singapore (MAS) and the National Artificial Intelligence Office (NAIO) are rolling out an initiative to build artificial intelligence (AI) capabilities within Singapore’s financial sector. The program is part of Singapore’s broader National AI Strategy and seeks to enhance the ability of financial institutions (FIs) to research, develop and deploy AI solutions. These include NovA!, a technical platform to generate insights on financial risk that will be developed by Temasek company Aicadium, as well as Veritas, a governance initiative to help financial institutions utilize AI and data analytics (AIDA) responsibly based on MAS’ fairness, ethics, accountability, and transparency (FEAT) principles.

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Hong Kong Central Bank Launches AML Regtech Platform

The Hong Kong Monetary Authority (HKMA), the territory’s central bank and financial markets regulator, launched an Anti-Money Laundering (AML) Regtech Lab (AMLab) to further enhance the adoption of regtech platforms and accomplish the regulator’s "Fintech 2025" strategy. The regtech product is targeted toward banks that address the risks of fraud-related mule accounts using network analytics. Additionally, they can enhance data and information sharing through public-private partnerships.

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Australian Banks Must Prepare to Deal With Negative Rates by Mid-2022 - APRA

The Australian Prudential Regulation Authority (APRA) told banks to prepare for the possibility of zero or negative interest rates by mid-2022 to prevent “material” risks. While the Reserve Bank of Australia (RBA) has repeatedly stated that a negative cash rate is highly unlikely, the regulator said it “does not preclude the possibility of a negative cash rate in the future or of other interest rates - falling to, or below, zero.” Australia’s cash rate has remained at a record low of 0.10% since November 2020 to offset the impact from lockdowns in major cities in the country, with the RBA prepared to keep them there for a few years even as inflationary and red-hot housing market pressures mount.

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2022 Regulatory Hot Topics: Considerations for Internal Audit

Expectations are that the financial services industry will experience a more challenging regulatory environment under the Biden administration than under the former administration.

The Bipartisan Infrastructure Bill: Who Wins, Who Doesn't

It's finally here - a historic spending package from the U.S. federal government amounting to more than $1 trillion in infrastructure investments. The question now becomes: What's next?

In May 2021, President Joe Biden, following through on a campaign promise, outlined a $2.3 trillion plan to re-engineer the nation’s infrastructure. After weeks of negotiations over the spring and summer, several proposals were eliminated entirely or trimmed significantly, including programs to upgrade and build new schools, child-care facilities, veterans’ hospitals and federal buildings; build, preserve and retrofit more than two million homes and commercial buildings; spark electric vehicle manufacturing, supply chains and sales; expand investment and production tax credits to speed up private investments in clean energy; and more.

Development at and During COP26: The First Week

“Innovation is the ability to see change as an opportunity — not a threat.” Internal audit functions uncertain or even apprehensive about making the next-gen journey and adopting an innovation culture should heed these words from Apple co-founder Steve Jobs. They should also keep Apple’s famous tagline — “Think different.” — in focus, because the change they’re about to embark on is fundamental and requires a significant mindset shift.

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.


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