GRC Testing Programs (“Did You Know CRC Can Do This?”)

Strengthening Compliance Through Independent, Risk-Based Testing

Regulatory expectations for investment advisers and broker-dealers continue to evolve beyond written policies and procedures. Increasingly, regulators expect firms to demonstrate that governance structures and compliance controls are operating effectively in practice. As a result, testing has become an essential component of modern compliance programs.

Governance, risk, and controls (GRC) testing provides firms with a structured approach to validating whether key processes function as intended, whether risks are appropriately identified and managed, and whether compliance programs remain aligned with operational realities.

At Compliance Risk Concepts, our GRC practice staff designs testing programs to help firms move beyond documentation and toward demonstrable implementation.

The CRC Difference: Experience Built from Both Sides of the Examination Table

CRC’s GRC testing programs are distinguished by the backgrounds of the professionals who design and execute them. Our team includes former regulators and former Chief Compliance Officers who have operated both inside examination programs and within regulated firms responsible for building and maintaining compliance frameworks under real-world business constraints.

This unique dual perspective allows CRC to approach testing methodically and pragmatically. Former regulators understand how examination teams evaluate control effectiveness, what documentation supports supervisory conclusions, and where firms most commonly fall short during exams. Former CCOs bring practical insight into operational realities: how controls are actually implemented, where processes tend to break down, and how remediation must function within business workflows rather than in theory alone.

The result is testing that is neither academic nor purely technical. Instead, it is designed to reflect how regulators assess programs in practice while remaining operationally realistic for firms to maintain.

A Methodical, Risk-Based Approach to Testing

The GRC team develops testing programs that are tailored to a firm’s business model, risk profile, and regulatory obligations. Testing is structured to evaluate not only whether policies exist, but whether controls operate consistently, exceptions are appropriately handled, and escalation and remediation processes function as intended.

Our approach typically includes:

• Risk-based scoping aligned with the firm’s business activities and regulatory exposure
• Control validation designed to test execution rather than documentation alone
• Sampling methodologies informed by examination expectations and industry practices
• Identification of root causes, not just isolated exceptions
• Practical remediation guidance that aligns with existing governance structures

Because our testing is independent of day-to-day compliance operations, firms receive objective analysis that can meaningfully support annual reviews, risk assessments, and ongoing program enhancements.

Why Testing Matters in Today’s Regulatory Environment

SEC and FINRA examinations increasingly focus on execution rather than design alone. Firms are routinely asked to demonstrate how controls operate, how exceptions are handled, and how risks are escalated and remediated. In many cases, deficiencies arise not from a lack of policies, but from gaps between written procedures and day-to-day practices.

Effective testing helps firms:

• Validate that supervisory and compliance controls are functioning as designed
• Identify gaps before they become examination findings
• Support annual reviews and risk assessments with objective analysis
• Strengthen documentation supporting compliance oversight

Testing also provides leadership and compliance teams with greater visibility into operational risk areas that may otherwise remain difficult to assess internally. By combining regulatory insight with practical compliance experience, CRC’s GRC team helps firms translate governance expectations into repeatable, defensible processes, strengthening programs not only for examinations, but for long-term operational resilience.