Terrorism Financing: Auditors Urged To Monitor Digital Payments System

Auditors in the country have been called upon to shift attention to begin auditing of Crypto Currencies and other evolving digital payment system in the country because they are possible money laundering and financing of terrorism tools

Speaking during a paper presentation at the quarterly general meeting of the Association of Chief Audit Executive of Banks In Nigeria (ACAEBIN), in Lagos, titled ‘Future of internal audit in an Increasingly digital word,” the managing director, Nova Merchant Bank Limited, Math Ude, said regulations around digital currencies and future innovations need to be covered by audit teams.

According to him, processes, controls and regulations around the recognition, reporting, safeguarding and management of crypto currency accounts, account holder information, transactions and all the possible money laundering and financing of terrorism risks that such innovation can bring are areas auditors must watch out for.

He said, “today, we have the advent of crypto currencies and regulations around these and future innovations need to be covered by audit teams. Processes, controls and regulations around the recognition, reporting, safeguarding and management of crypto currency accounts, account holder information, transactions and all the possible money laundry and financing of terrorism risks that such innovation can bring are areas auditors must watch out for.”

“The Central Bank of Nigeria (CBN) issued a circular to all deposit money banks and payment ser- vice providers in February 2021 on its regulatory framework for open banking in Nigeria. CBN Regulatory Guidelines on the e-Naira was issued in October 2021 – to provide few ex- amples of new regulations coming up in the digitization age. “

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According to Ude, regulations have evolved to protect customers and banks from exploitation, abuse and misuse, but auditors cannot overlook the regulatory angle of in- creased digitisation.