Risk-Based Internal Audit And Compliance

Banking and Financial Services

Course Overview

Course Objectives

  • Define internal audit, its scope and function within the company
  • Describe the types of risks and what the risk-based internal audit approach is
  • List the internal audit standards constituting the framework of the internal audit activity
  • Distinguish the types of internal audit assignments related to operational, compliance or financial internal audit
  • Describe the internal audit fieldwork guidelines and apply techniques for risk identification, controls identification and controls testing
  • Select the appropriate internal audit test tools and list the advantages and disadvantages of each
  • Identify best sampling techniques in an internal audit assignment in terms of sample size or sample selection
  • Recognize fraud and express internal auditor’s responsibility upon fraud detection

Course Outline

Risk and internal audit overview

  • Definition of risk
  • Types of risk in an organization
  • Functions of management: planning, organizing, implementing and controlling
  • Defining internal audit
  • Internal audit as a function of corporate governance
  • Scope and building blocks of corporate governance
  • Reasons to have an internal audit function
  • Distinguishing internal from external auditing
  • Scope of internal auditing: the internal audit charter
  • Staffing the internal audit function
  • Role of audit committee

Internal audit standards

  • Attribute standards
  • Performance standards

Types of internal auditing

  • Performance auditing
  • Operational auditing
  • Financial auditing: accounting cycles audited by the internal audit function
  • Compliance auditing
  • 20 questions directors should ask about the internal audit function

Internal audit implementation: fieldwork guidelines

  • Information gathered by internal auditors
    • 4 qualities of information
    • Sources and nature of information
    • Assessing the degree of persuasiveness
  • Types of engagement procedures
    • 15 internal audit test tools
    • Observation
    • Interviewing: a disliked technique
      • Interviewing skills: how to run a successful interview
      • Role play: internal auditor in action
    • Examining records
      • Verification and confirmations
      • ?Vouching and tracing
      • Re-performing
  • Internal audit working papers
    • Best practices for managing working papers
    • Retention policies
  • Communicating fieldwork results and recommendations
    • Legal considerations for communicating results
    • 4 attributes of an observation or recommendation
    • Disseminating results and exit meetings

The fieldwork: risk-based auditing

  • Defining management assertions
  • Risk assessment process
    • Reason for risk based audit planning
    • Evaluating risks
    • Techniques to identify the auditable units
      • Criteria for selecting auditable units
      • Scoring and weighing risks
    • Prioritizing risk and developing audit plan
    • Methods to generate list of risks
  • Identifying entity level controls to mitigate risks
    • Broad definition for types of controls
    • Essential components of effective internal control system: 'COSO' model
    • Criteria for unsatisfactory rating for control components
    • Methods to generate list of controls
      • Insights on flowcharting for understanding cycles and controls
  • Testing of internal controls
    • Design and implementation of an internal control
    • Operating effectiveness of an internal control
  • Tips and tools for audit sampling

Fraud

  • Definition and characteristics of fraud
  • Internal auditor’s role in a fraud case
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Course Features
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  • 8 Weeks Online
  • 1-2 Weeks Classes
  • Certified

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