Commission Delegated Regulation (EU) 2026/544 Article 7: Criteria for assessing whether the internal control mechanisms are sound

Article 7 - Criteria for assessing whether the internal control mechanisms are sound

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Article 7

Criteria for assessing whether the internal control mechanisms are sound

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The criteria for assessing whether the internal control mechanisms of an external reviewer are sound, as referred to in Article 30(2) of Regulation (EU) 2023/2631, shall be the following:

((a))

the control mechanism is:

((i))

effective to safeguard the independence of internal control functions from the business lines;

((ii))

adequate for the nature, scale and complexity of the business of external reviews;

((b))

there is a risk management framework that establishes the external reviewer’s mechanisms for the effective identification, assessment, monitoring, mitigation and reporting of all risks that could materially impact an external reviewer’s ability to meet its obligations under Regulation (EU) 2023/2631;

((c))

there are preventive and detective control measures to address specific operational risks;

((d))

there are internal and external information and communication procedures that ensure the flow of relevant, timely and reliable information;

((e))

there are monitoring procedures that allow for the continuous evaluation of the adequacy and effectiveness of the internal control mechanisms.