Security and compliance in the financial and legal activities of the organization

Security in the financial and legal sphere is considered as a set of measures and means to ensure the protection of the organization's activities. The issue of continuous modernization of the control and supervision system is relevant. This is due to possible damages and losses to the organization in connection with corruption and fraudulent schemes, potential risks. In addition to direct financial damage, there are legal and reputational negative consequences.

The well-being of the organization, its sustainable development depends on the formation of a positive reputation and reliability. A lot of money is invested in building a positive reputation. One adverse event, threats to the security of an organization's information system can make all efforts negligible [1].

Considering internal measures to ensure the safety of data, prevent losses and prevent risks, it is necessary to distinguish between the concepts of "security" and "compliance" in the company's activities.

The security of an organization is achieved by ensuring and maintaining the protection of its personnel and the interests of the organization from internal and external threats in order to reduce the negative consequences of undesirable events and achieve the best results [2].

The term "security" - a set of measures to protect the information and technical assets of an organization. The security department keeps track of employees who have access to internal systems, such as information technology.

“Compliance” – the application of control and oversight measures in the area of company data and the legal regulations that apply to them. Compliance control is a necessary procedure in the financial and legal activities of an enterprise. The compliance service controls the economic activity of the enterprise in accordance with the rules and regulations, including political, financial, legal, economic, ethical and other areas [3].

The purpose of compliance is to minimize the risk of the company's involvement in processes associated with financial losses and loss of trust on the part of society represented by regulatory authorities, investors, partners, shareholders, and customers.

Compliance in the legal and financial sphere arose in connection with the identification of inconsistencies in the field of monetary accounting, violations in compliance with the norms of law and ethics in companies. These circumstances resulted in losses in the amount of several million dollars. In addition, companies with such violations suffered reputational costs. Such organizations have suffered losses of a different kind in connection with numerous lawsuits as a consequence of the established violations.

As a result of the investigation of the Securities and Exchange Commission in the 70s of the XX century, violations were revealed in more than 400 American companies. Upon completion of the investigation, representatives of organizations confirmed illegal payments in the amount of more than $300 million to officials of foreign states, politicians and political parties. The list of violations ranged from bribing high-ranking officials to transferring sums in order to help meet the needs of the organization [4]. Based on the proceedings and for the sake of maintaining order, confidence in the business management system, the Federal Foreign Corrupt Practices Act of 1977 (FCPA) was introduced. The law laid the foundation for the emergence of compliance in the world.

The functions of the internal security service of the organization and the compliance officer have differences.

In the event of a discrepancy, the internal security service begins its investigation to eliminate problems or professional errors of the organization's employees.

The compliance officer carries out compliance control and identifies possible risks. The compliance manager prepares the necessary recommendations in order to eliminate risks or reduce their effects on the company's activities. He is a responsible observer and controlling person in the process of minimizing risks and their subsequent losses [5].

Compliance officers in the legal and financial services sector

Organizations and companies carry out labor activities in a transitive society. Government agencies, stock exchanges, industry bodies are constantly changing legal and regulatory systems. The compliance officer is responsible for ensuring compliance with regulatory requirements.

Advise companies on the interpretation of policy initiatives. Compliance officers liaise with stakeholders and management as part of complying with laws and fulfilling the company's obligations to partners. A compliance manager understands how regulations affect the business. The professional is able to advise the organization on regulatory matters to effectively enforce compliance. Technical knowledge of regulations, their understanding and interpretation is the key to regulatory compliance. The company is obliged to com- ply with the requirements set by external regulatory bodies [6].

Compliance officers in the financial services sector deal with issues related to financial crime. Examples include monitoring insider trading by employees of an organization or recording violations. Know your customer (KYC) – a stable expression of banking and exchange regulation for financial institutions and bookmakers. It is the duty of authorized individuals handling private money to identify and identify the agent before conducting a financial transaction. Anti-Money Laundering software (AML software) - the software helps companies comply with legal requirements for regulated entities to prevent or report money laundering activities. The digital design of the software facilitates faster and more accurate compliance and investigations when needed. Professionals involved in financial or corporate compliance should have experience in risk management and control, preferably in a financial services industry such as a bank or professional services firm.

Compliance practice is based on software and legislation. Each of the programs allows you to extract the necessary data from a massive set of information to control and prevent risks and their consequences.

Base Erosion and Profit Shifting (BEPS) is a set of tax planning schemes aimed at removing taxable profit from taxation in those countries where the profit was received. The Common Reporting Standard (CRS) is a common reporting standard for financial accounts between tax authorities developed by the Organization for Economic Co-operation and Development in 2014. The goal of the standard is to combat tax evasion. Operates on the basis of FATCA (Foreign Account Taxation Act).

Earnings before interest, taxes, depreciation and amortization (EBITDA) is an analytical indicator equal to the amount of earnings before interest, taxes, depreciation. The indicator is calculated on the basis of the company's financial statements and allows you to determine the stability of its economy and the profitability of its activities. Thus, by foreshadowing risks, compliance and EBITDA protect the company from serious financial losses and bankruptcy.

Environmental, Social, and Corporate Governance (ESG) is an ethical investment. Under "S" they also understand sustainability - "sustainable development". ESG is a criterion indicating the social responsibility of the company and demonstrates the company's involvement in solving environmental, social and management problems. Organizations with the highest rating on this criterion are preferred for mutually beneficial cooperation. Companies have realized that a high ESG rating helps mitigate environmental risks, and a company's demonstration of its social responsibility has a positive effect on customer loyalty and strengthens its market position.

Sanction Screening is a service for filtering transactions and messages. This tool is designed for secure SWIFT payments. The service combines a scanning mechanism and regular updates of sanctions lists using secure SWIFT channels. This tool allows you to check the integrity of partners and other persons through the current sanction’s lists, verification of transactions. Sanction Screening allows the compliance specialist to exercise control.

Foreign Account Tax Compliance Act (FATCA) – the law on the taxation of foreign. This law allowed American government agencies, upon their request, to receive information about foreign clients from banking structures of other countries with which an appropriate agreement was concluded on the transfer of such data. The purpose of this law is to increase the amount of tax revenues to the budget and protect the system from tax evasion. Another one of the laws. Sarbanes– Oxley Act of 2002 (SOX) is a federal securities law. The law significantly tightened the requirements for financial reporting and the process of its preparation. The law was adopted in connection with numerous corporate scandals related to unscrupulous managers of large companies. The main content of SOX is that companies are required to record in detail all their business processes and operational activities. The goal of SOX is to fight financial fraud.

Conclusion.

Compliance in the financial and legal activities of the organization has broader functions than the internal security service of the organization. Compliance is part of the internal security system. It can be seen as a tool in the field of security in the organization, as well as the prevention of legal and financial risks. It is designed to reduce the number of material disputes of the subjects, as well as to improve the performance of companies in order to pass state inspections as "softly" as possible [7]. The task of the compliance officer is to solve a number of complications arising in the course of the work of an economic entity, such as:

• -    Fraud prevention.

• -    Ensuring the security of company data.

• -    Support in the field of compliance of the organization's actions with the norms of legislation.

• -    Protection of human rights, ethical standards.

• -    Maintaining the positive reputation of the company.

Compliance is aimed at protecting the business. He is able to adapt business processes and the internal system of the company to improve its reputation, rating, increase profits in order to maintain the status of the subject or its growth.