CTRL 6.1.2 Independence of internal control and assurance functions etc

(1) An authorised firm must ensure that each individual who exercises an internal control and assurance function is sufficiently free from influence to be effective in achieving the function’s purpose.
(2) The requirement in subrule (1) is satisfied if reasonable measures have been taken to ensure that:
(a) no such individual is remunerated in a way that would tend to undermine his or her independence and objectivity in exercising the function;
Note For the requirements relating to a firm’s remuneration policy, see rule 3.1.16.
(b) no such individual is involved in performing a function that generates, or is intended to generate, revenue for the firm;
(c) no such individual is limited or restricted as to the matters that he or she can investigate or report on in the exercise of his or her function;
(d) the reports and conclusions of such an individual can be honest and candid, without fear of reprisal; and
(e) pressure or influence is not applied to such an individual to modify his or her reports or conclusions.
Guidance
An internal control and assurance function cannot be effective unless its exercise is independent. Independent means, broadly, that the individual who exercises the function is not subjected to pressure to mould or manipulate his or her conclusions or results. An internal control and assurance function that produces only results that are convenient to the firm’s governing body or management would not be regarded as satisfying rule 6.1.1.
(3) An authorised firm must ensure that:
(a) each individual who exercises an internal control and assurance function; and
(b) each employee who is allocated responsibilities within the firm’s corporate governance framework and its risk management framework;
has all of the following:
(c) the necessary authority to exercise the function or carry out his or her duties;
(d) access to all necessary information, documents and records of the firm;
(e) appropriate access to the firm’s governing body and senior management.

 

Derived from QFCRA RM/2020-4 (as from 1st July 2021)