Regulatory Compliance and Legal Concepts Practices

Regulatory Compliance and Legal Concepts
Student's Name
Institution
Define the purpose of an internal audit
One of the important functions in many organizations is internal audit. Internal audit serves a very crucial role in not only protecting the organization from risk but also assuring investors that their investments are safe. According to Raiborn, Butler, Martin, and Pizzini (2016), the main purpose of an internal audit is to evaluate the internal controls and the processes of an organization. The evaluations are continuous, and the results of the evaluations help determine whether the organization is complying with the laws and regulations, both at the local and international levels. The audit committee and the management, who are some of the primary users of the internal audit assessments, use the information to identify areas of weakness. Kabuye, Nkundabanyanga, Opiso, and Nakabuye (2017) indicate that internal audits are used to make proposals on how the organization's internal controls can be made stronger. They also identify areas of weakness and make recommendations for change.
One of my responsibilities as a due diligence officer at my current workplace is to assist in fraud management. Financial institutions face a high risk of fraud, especially in the age of technology, where the adoption of online and mobile banking has been high. This is the area that I've been assigned by my employer, and I usually identify red flags in the company's financial systems. Internal audits have been very instrumental in this role because they have identified loopholes in the system that could be used by fraudsters. As Kabuye et al. (2017) reveal, when organizations have well-established internal audit programs, they are more likely to identify how the systems and controls put in place can be manipulated by fraudsters. An effective internal audit program can also be used to detect fraud. As a due diligence officer, I verify the identity and credentials of customers and examine their digital presence. Internal audits have helped me become more competent in verifications because I know what to look for and what factors or aspects I should consider as red flags. It is through these internal audits that the due diligence process at the company has been strengthened and made efficient. Through a competent due diligence process, the company I work for has been able to prevent fraud. For instance, I have been able to detect identity theft through online alert services based on changes made to a client's account. It is also worth noting that in some cases, internal auditors take up the role of due diligence (Kabuye et al., 2017), and I have had the privilege of working with some of the best internal auditors, and their insights and work ethics have helped me perform my duties better.
Identify the elements of an effective corporate compliance program
Organizations are expected to put in place effective compliance programs to establish a culture of compliance with laws and regulations at all levels of the organization. The following elements must be present for a compliance program to be considered effective (United States Sentencing Commission (USSC), 2018; Root, 2019):
* Written internal policies and procedures
This ensures that the organization can detect and prevent fraudulent or illegal actions. This can be done by putting in place a code of conduct or an ethics policy.
* Continuous employee training programs
This is to familiarize employees with the compliance program, so they know what is expected of/them.
* Designate a compliance officer and committee
This is to ensure that there are specific people who are in charge of the compliance program. It creates clarity of who needs to do what concerning the compliance program.
* Conduct internal auditing and monitoring
This is to make sure that the program is effective and up to date with current laws and regulations. Internal auditing and monitoring also ensure that problems can be detected competently. There should be clear time frames on how often the audits and monitoring should be carried out.
* Establish effective lines of communication
This is to ensure that all involved parties are constantly informed about the program. Open lines ensure that whenever an employee or other involved parties have questions or concerns about anything pertaining to compliance, they have access to updated information.
* Enforce standards using a well-publicized disciplinary guideline
It is important to have a plan on how the compliance program will be enforced. This can be done by putting in place incentives to encourage compliance and disciplinary actions to discourage non-compliance. Such measures will ensure that employees understand the gravity of the program.
* Respond swiftly to identified problems using corrective actions
This element is crucial because it ensures that similar problems will not arise again. Organizations can do this by changing certain aspects of the systems and controls that had left the company vulnerable to the problem.
Part of my responsibility as a due diligence officer is to ensure that the company has a well-established compliance culture. I cannot fulfill this duty effectively in the absence of a compliance program. For instance, there cannot be a culture of compliance if employees are not aware of the compliance program and all that it entails. Thus, all these elements discussed above are crucial and influence some of my duties directly. Currently, I am fulfilling this role by ensuring that employees are adequately trained and communicated periodically about the importance of compliance not only with the internal policies and procedures but also with government regulations in the fin...