COMPLIANCE AUDIT
Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Advanced Bank Management — CAIIB.
One-liners from this chapter
Free sample — 8 of 65 rapid-fire Q&A cards.
What is the primary objective of compliance audit in banks?
The primary objective is to independently assess whether the bank is adhering to applicable laws, regulations, internal policies, and codes of conduct, thereby minimizing legal and regulatory risk.
What is the difference between compliance audit and legal audit in banks?
Compliance audit checks regulatory adherence; legal audit reviews legal risks.
Which RBI circular established the framework for compliance function in Indian banks?
RBI's circular on 'Compliance Function and Role of Chief Compliance Officer' (2020) established a comprehensive framework requiring banks to have a dedicated, independent compliance function headed by a CCO.
What is the frequency of compliance audit recommended for high-risk areas in banks?
High-risk areas should be audited quarterly or more frequently.
What is the role of the Chief Compliance Officer (CCO) in a bank?
The CCO is responsible for overseeing the compliance function, reporting to the Board/MD & CEO, identifying regulatory changes, and ensuring the bank's operations conform to statutory and regulatory requirements.
What is the role of the Board of Directors in ensuring compliance in a bank?
Board approves compliance policy and oversees its effective implementation.
How does compliance audit differ from internal audit in a bank?
Compliance audit specifically focuses on adherence to laws, regulations, and internal policies, whereas internal audit has a broader scope covering risk management, controls, and operational efficiency across all functions.
What is meant by 'compliance gap analysis' in banking?
It identifies differences between required regulatory standards and current bank practices.
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