Summary

Both internal and external audits are subject to increasing scrutiny by the regulators. Regulatory examiners are now including their assessment of the audit function in their inspection reports. Increasingly, there is comment on audit in published enforcement actions against an organization for AFC regulatory breaches and/or weak AFC controls.

The consequences for certain violations of AFC regulations can include personal and individual accountability of the board members and senior management. It is therefore in the interest of senior management that they support their organization’s audit function to operate effectively.