Principles-Based Regulation Requires Creative Thinking in Financial Services Synopsis

‘The principles-based approach to regulation in the United Kingdom financial services creates many opportunities for innovation and competition for firms and internal auditors.’

Customer-driven principles established by the Financial Services Authority (FSA) challenge all aspects of the business. Professional internal auditing with its International Professional Practices Framework is also principles-based. Comparison of both principles shows close relationships and opportunities for creative thinking in internal auditing. Cutting edge internal auditing resources and practices are discussed in three main areas of financial services organizations.

Contributed by Vicky Kubitscheck, Head of Audit, Risk and Compliance at AEGON UK. She leads the internal audit, risk and compliance groups across AEGON UK, providing services that support the organization’s corporate governance, risk and compliance frameworks. Her work is centred on developing integrated risk and control management, and raising the profile of internal audit, risk management and compliance in the business. She led the implementation of an enterprise risk management approach within AEGON UK and previously at AXA, developing techniques that are focused on gaining management accountability and embedding sound risk management that is aligned with the ambitions of the business. Vicky is a member of the ABI Chief Risk Officer Forum, and as a Fellow of the Institute of Internal Auditors, she is also active in promoting the internal audit profession. Vicky chairs the Insurance Internal Audit Group, which has over 100 corporate members, and has served on various IIA District Committees, including currently the Scottish District Committee.

After Reading the Case Study Consider:

1. What customer-focused high-level principles are there in the regulation of your organization that should influence innovation in your internal auditing?

2. Do any of the three main areas discussed influence innovation in your internal auditing?