Compliance Testing – Step 2

So you have made some time to work on Step 1 – Developing a Risk Assessment. It is time to move on to Step 2: Determining Tests to be used.

Based on the risk assessment, which test will allow you to test those risks?  Here are a couple to ponder until next week:

  • Transactional – those tests based on transactions (reviewing trades against client agreements, current holdings and IPS prior to submission)
  • Periodic – those that occur at various intervals (Code of Ethics personal securities transactions report review)
  • Forensic – those done over time and looking for a pattern (unreported trade errors)

Next I’ll discuss some specific tests to consider.

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