According to Basel Committee on Banking Supervision guidelines, which of the following statements best describes the relationship between the internal audit function and compliance?

Question

Options

• AThe internal audit methodology should include an assessment of compliance risk.
• BAn internal audit program of adequacy of the bank's compliance function should be es-tablished,
• CThe compliance function and internal audit function should be combined.
• DThe auditors should not discuss internal audit findings with compliance management to maintain

• A
  71% (25)
• B
  9% (3)
• C
  17% (6)
• D
  3% (1)

Explanation

According to the Basel Committee on Banking Supervision guidelines, the internal audit function should evaluate the adequacy and effectiveness of the bank's compliance function and its compliance risk management framework. This includes assessing the compliance risk inherent in the bank's activities, products, services, and systems, as well as the compliance policies, procedures, controls, and reporting mechanisms. The internal audit function should also review the transactions and records of the bank to ensure compliance with applicable laws, regulations, and internal standards.

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