A recent anti-money laundering audit revealed several regulatory reporting violations and lapses with the organization's anti-money laundering policy. As a result, the compliance officer has created a follow-up matrix to document progress in correcting the identified deficiencies.
To whom should the compliance officer provide regular updates of corrective action to help ensure the appropriate oversight?
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A. B. C. D.D
In the given scenario, the compliance officer has created a follow-up matrix to track the progress in correcting the identified deficiencies after an anti-money laundering (AML) audit revealed regulatory reporting violations and lapses with the organization's AML policy. To ensure appropriate oversight and keep relevant stakeholders informed, the compliance officer should provide regular updates of corrective action to the designated board committee, which is option D.
Here's a detailed explanation of why the designated board committee is the appropriate choice:
Audit management (option A): While audit management is responsible for conducting the AML audit and identifying the deficiencies, they are typically focused on the auditing process itself. Their role is to assess the organization's compliance with AML regulations and identify areas for improvement. However, they are not directly responsible for overseeing the corrective action or implementing changes to address the deficiencies.
Human Resources (option B): Human Resources typically handles personnel-related matters, such as hiring, training, and employee policies. While they may have a role in ensuring employees receive AML training and adhere to policies, they are not the primary stakeholders for overseeing AML compliance or monitoring corrective actions.
Business line managers (option C): Business line managers are responsible for the day-to-day operations of specific business units within the organization. While they may have a role in implementing AML policies and procedures within their respective departments, they may not have the holistic view or authority to oversee organization-wide AML compliance or monitor corrective actions. They are more focused on the operational aspects of their business units.
Designated board committee (option D): A designated board committee, such as the audit committee or compliance committee, is typically responsible for providing oversight of the organization's risk management, compliance, and internal control processes. They are tasked with ensuring that the organization adheres to applicable laws and regulations, including AML regulations. This committee has the necessary authority, expertise, and responsibility to monitor the corrective actions taken to address the deficiencies identified in the AML audit. Regular updates to the designated board committee help ensure appropriate oversight and accountability.
In summary, while options A, B, and C may have some involvement or interest in AML compliance, the designated board committee (option D) is the most appropriate choice for receiving regular updates on corrective actions. They have the oversight role and authority to ensure compliance with AML regulations and can provide guidance and support to the compliance officer in addressing the identified deficiencies.