Financial Crimes Compliance Auditing in a Consent Order Environment

Author: Jason Smith, CAMS-Audit

Recent consent orders are being regarded as an increasing benchmark for Bank Secrecy Act /anti-money laundering (BSA/AML) regulatory interpretation. The question faced by most financial institutions today is how they can adapt their audit approach to account for this regulatory shift. This whitepaper will establish that the July 2012 Permanent Subcommittee on Investigations (PSI) Report for HSBC was the impetus for this notable change in the tone of consent orders. A comparison of recent consent orders versus those published prior to the HSBC PSI report will show that regulators use these actions to establish heightened Financial Crime Compliance (FCC) standards. The solution proposed by this paper is adapting audit practice to fit increased regulatory scrutiny.

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