The Institute of Internal Auditors (IIA) announces major update to the widely accepted Three Lines Model

05 August 2020

Amid rapid change, unprecedented new risks, and the growing complexity of organisations, The Institute of Internal Auditors (IIA) recently announced a major update to the widely accepted Three Lines Model. Originally known as the Three Lines of Defense, the model has gained popularity for organising governance and risk management in organisations. However, acknowledging that risk-based decision-making is as much about seizing opportunities as it is about defensive moves, the new Three Lines Model helps organisations better identify and structure interactions and responsibilities of key players toward achieving more effective alignment, collaboration, accountability and, ultimately, objectives. Continue reading…

Whistleblowing Management : The Coming Regulatory Storm

04 August 2020
Knowledge Base

by Frank Staelens

I would like to explain the regulation’s broad impact and to offer guidance for compliance. Most listed companies and large public organisations already consider whistleblowing management as an important governance mechanism with, in most cases, boards/audit committees being accountable to measure its effectiveness. This group is now moving toward the use of whistleblowing systems beyond reporting wrongdoing and starting to understand that instilling a transparent, “speak up” culture is perceived by stakeholders as a sign of good health. However, many other organisations still have a different position on the subject. But keep in mind, within the EU all member states have until December 17, 2021 to transpose the new whistleblower protection rules into national law.  Continue reading…

Euro area banking sector resilient to stress caused by coronavirus, ECB analysis shows

03 August 2020

The European Central Bank (ECB) recently published the aggregate results of its vulnerability analysis of banks directly supervised within the Single Supervisory Mechanism. The exercise assessed how the economic shock caused by the coronavirus (COVID-19) outbreak would impact 86 euro area banks and aimed to identify potential vulnerabilities within the banking sector over a three-year horizon. Overall, the results show that the euro area banking sector can withstand the pandemic-induced stress. Continue reading…

Lockdown or Knock-out? Part 4: Is the corona detector a solution?

31 July 2020
Knowledge Base

by Michel Klompmaker

Let’s start with the facts. Last week was the worst week to date, with 1.794,124 registered infections. Many politicians seem to be turning a blind eye to this reality and we should fear the fact that global figures, especially in Asia and Africa, are not correct. After all, not all cases of infections were registered in a reasonably civilised country such as the Netherlands. Meanwhile, EU Commissioner Gentiloni says “It is time to pump new confidence and new money into our economies in this critical situation.” There are now more than 17 million registered coronavirus patients worldwide and the EU has adjusted its economic expectations for the EU countries downwards. Continue reading…

Lieve Lowet

Lieve Lowet

EU Affairs consultant and lobbyist

The 2020 Solvency II review: The Commission consults but a lot of water will still flow under the bridge

29 July 2020

The Commission has started its public consultation on the review of the Solvency II framework directive (SII FD). The consultation period will run till 21 October 2020. Apart from the SII FD, the scope of the review may extend to the SII Delegated and Implementing Regulations as appropriate. Normally, would it not have been for the pandemic crisis, EIOPA would already have delivered its technical advice requested by the Commission as the due date for that advice was 30 June 2020 (see formal request for technical advice sent to EIOPA 11 February 2019). However, on 8 May 2020, EIOPA, in close coordination with the European Commission, decided to delay its advice and holistic impact assessment to deliver it at end December 2020. This will allow EIOPA to take into account the importance of assessing the impact of the current Covid-19 situation on the SII Review. But this also moves the calendar with 6 months. The Commission is also concurrently consulting on its Inception Impact Assessment. The roadmap is open for feedback for 8 weeks and runs till 26 August 2020. The Commission will summarise the input received in a synopsis report explaining how the input will be taken on board and, if applicable, why certain suggestions can’t be taken up. In that roadmap, the Commission foresees a new legislative proposal by Q3 2021.  Continue reading…

Effective internal control system decreases to an acceptable level risks of not meeting the objectives

28 July 2020
Knowledge Base

by Alex Movchan

We recently had an opportunity to speak with a man named Edmund Saunders, CICA, CFE (President of Institute for Internal Controls Europe, ex-advisor from the UK government to Polish officials in the banking sector). He is also very experienced and dedicated in the following fields of internal control, fraud, internal auditing, risk management, international banking and anti-fraud and anti-corruption – identification, avoidance and combatting techniques. Dear Edmund, thank you for finding time for the interview. I know that you have a lot of experience in building internal control systems, mostly in financial institutions, all around the world (in UK, Switzerland, USA, Poland, etc.). In your opinion, what should be the core focus, the main 2-3 objectives to focus on, while building an effective control system within an organisation? Continue reading…

Censorship in Germany, but now with support from the USA

27 July 2020

by Claudia Zimmermann

It may sound a bit strange at first glance. Censorship in Germany, that has definitely been over since World War II? That’s right. Fortunately, there is freedom of expression in Germany and there is freedom of the press. But still there is something strange going on. Not a single journalist is arrested and sentenced to death in Germany, unlike in some other countries such as China and Iran. This is fortunate, but some strange things do happen. And why then, you wonder? Well, the answer is simple. Very large companies like to sit on the heads of government and ministers and state secretaries of their interest to defend their own major financial interests. I will explain very specifically how this works in my case.  Continue reading…

Alex Movchan

Alex Movchan

Alex Movchan CIA CICA CFE is the President of the Institute for Internal Controls

Agile Internal Auditing

23 July 2020

This is my first English-language contribution as a permanent external author of the Risk & Compliance Platform Europe. As my surname suggests, I come from Eastern Europe and I am active in several countries, such as Poland, Ukraine and Belarus. From now on I will regularly write and publish about my expertise in the fields of Audit, Internal Control and Fraud Risks Prevention. I will start with the views of a special woman, Alkistis Gkiosi, BAcc, ACCA, CIA, CFE, who is known as a Compliance Expert and Internal Controls and Regulatory Affairs Professional. She has gained a lot of international experience, thanks to the various positions she fulfilled initially in the fields of external audit and later in internal audit. The concept that has been recently trending among the experts in internal auditing globally is “agile internal auditing”.  Continue reading…

European Commission recommends that Member States do not allow financial support to companies not on EU’s list of non-cooperative tax jurisdictions

22 July 2020
Knowledge Base

The European Commission recently recommended that Member States do not grant financial support to companies with links to countries that are on the EU’s list of non-cooperative tax jurisdictions. Restrictions should also apply to companies that have been convicted of serious financial crimes, including, among others, financial fraud, corruption, non-payment of tax and social security obligations. The aim of today’s recommendation is to provide guidance to Member States on how to set conditions to financial support that prevent the misuse of public funds and to strengthen safeguards against tax abuse throughout the EU, in line with EU laws. By coordinating restrictions on financial support, Member States would also prevent mismatches and distortions within the Single Market.  Continue reading…

CPMI report identifies steps to enhance cross-border payments

21 July 2020

The Committee on Payments and Market Infrastructures’s (CPMI) report entitled ‘Enhancing cross-border payments: building blocks of a global roadmap’ comprehensively sets out the necessary elements to improve cross-border payments to make them faster, cheaper, more transparent and inclusive. The CPMI is committed to taking a leading role in developing and implementing a global roadmap as part of the G20’s mission to tackle this multidimensional task. It also aims at resolving the longstanding frictions and challenges in cross-border payments that would boost global trade, development and economic growth. Continue reading…