Financial Crime World

Auditing and Risk Assessment in Finance: Hong Kong’s Top Concerns

A recent survey conducted among Chief Audit Executives (CAEs) in Hong Kong has revealed that they perceive a riskier near- and long-term environment compared to their colleagues in other executive roles. This report highlights the top concerns of internal audit leaders in Hong Kong, including business-related risks that could impede their organisations’ ability to meet their performance objectives.

Top Risks Facing CAEs in Hong Kong

According to the survey, CAEs attribute the highest-magnitude ratings to the following business-related risks:

  • Failure to Meet Performance Objectives: 71% of CAEs believe that their organisation may struggle to achieve its goals over the next 12 months.
  • Compliance and Regulatory Risk: 64% of CAEs perceive compliance and regulatory risk as a major concern, particularly with regards to DORA compliance and sanctions risk assessment.
  • Technology-Related Risks: 59% of CAEs believe that technology-related risks, such as AI adoption and cybersecurity threats, pose a significant threat to their organisation’s financial stability.

The Importance of Effective Auditing and Risk Assessment

Despite the challenges posed by these risks, CAEs in Hong Kong recognise the importance of effective auditing and risk assessment in ensuring the financial stability and integrity of their organisations. In response to this pressing need, several whitepapers have been published that offer practical guidance on topics such as:

  • DORA Compliance: Best practices for complying with the EU’s Digital Operational Resilience Act (DORA)
  • Sanctions Risk Assessment: Strategies for assessing and mitigating sanctions risk in financial institutions
  • AI in ESG: The role of artificial intelligence in environmental, social, and governance (ESG) reporting and assessment

Industry Insights

In a recent podcast, industry experts discussed the implications of AI on ESG and the importance of adopting an open approach to compliance. The speakers highlighted the need for CEOs and board members to support their compliance functions and maintain a tone at the top that prioritises transparency and accountability.

Staying Vigilant in a Changing Financial Landscape

As Hong Kong’s financial landscape continues to evolve, CAEs will need to remain vigilant in identifying and mitigating risks that could impact their organisations’ performance. By staying up-to-date with the latest industry developments and best practices, internal audit leaders can help ensure the long-term success of their companies.

Conclusion

Effective auditing and risk assessment are crucial for ensuring the financial stability and integrity of organisations in Hong Kong’s fast-paced financial environment. In this special report, we have examined the top risks facing CAEs in Hong Kong and explored the importance of adopting best practices in areas such as DORA compliance, sanctions risk assessment, and AI in ESG. By staying informed and proactive, internal audit leaders can help their organisations navigate the challenges ahead and achieve long-term success.