Peoplehave an innate ability to notice the irregular, to spot what is wrong, and toperceive what is out of order. A misspelled word, a mispronounced name, a stainon a white shirt – these never go unnoticed. In fact, some people are soskilled at pointing out mistakes that they even made it their life-longprofession, browsing through records to identify exceptions. However, aprofession with an oversight function requires more than spontaneous remarks onthe incorrect.
It demands the observance of a systematic process of examinationthat involves preparation, execution, and proposition. For a complianceofficer, this process is core to the conduct of compliance testing. Compliancetesting is essential for an institution to continue thriving. In addition to meeting regulatory expectations, ensuring that policiesand procedures are properly implemented and strictly observed by the businessunits is paramount in the management of compliance risks.
Addressing the root cause of any identifiedcompliance issue prevents the possibility of being imposed with penalties andfines; these directly impact an institution’s capitalization. Hence, theconduct of compliance testing must be handled carefully and systematically to yieldan accurate representation of an institution’s actual status of compliance. Thecompliance testing process begins with initial planning.
The compliance testingteam gathers information about the business unit’s operations, facilitates thegeneration of various reports, samples accounts and prepares the needed materials.It is necessary that all records, documents, and materials are secured prior todeparture. Next,the team does fieldwork for the conduct of interview and review of recordsexclusively maintained in the business unit. Compliance examiners validate thepersonnel’s knowledge of the policies during the interview and determinewhether this translates to actual results.
They identify the cause of issuesand propose corrective actions to sufficiently address the same. All documentedfindings and observations are discussed with the business unit during the exitconference.Finally, compliance testing results are drafted, reviewed and reported to the boardcommittee for the approval of the recommended courses of actions. Asthey are expected to produce reliable results for the governance of aninstitution, compliance examiners must never stop at revealing mistakes. Afterall, it is more than mere nitpicking.