Effective Internal Audit for Central Banks

PDF brochure can be downloaded here.

Monday 28 June 2010

Internal Audit in the Risk Management Life-Cycle

Chairman’s opening remarks
Jeffrey Ridley, Visiting Professor of Auditing, London South Bank University

This opening discussion will give the group an opportunity to consider some of the key challenges facing central bank internal auditors in today’s difficult economic conditions. Delegates will be offered the opportunity to express their main areas of interest for discussion during the course.

Internal audit and risk: developing synergies between internal audit and operational risk management
Speaker to be confirmed

In this session the speaker will outline how internal auditors and operational risk managers can work together in order to better manage a central banks business and reputational risks. Both functions have seen their role increase dramatically in the recent years and should for the sake of efficiency, develop synergies in their common field of professional interest, ie analysis and reduction of risks in the organisation.

Enterprise risk management: evolution of a strategic function
Tony Fudge, Former Quality Assurance Director, Barclays Internal Audit

Over the last 18 months central banks, like many other organisations, have faced hard-to-predict, high-impact risks that flow from changing business priorities and market conditions. Stemming from such threats as increased asset price volatility and the global liquidity crunch as well as natural disasters, pandemics and political crises these extreme risk exposures are a challenge that all internal assurance departments need to address. One means to achieve this is embedding an enterprise-wide approach to risk management. In this session, the speaker will discuss how internal auditors can better manage strategic, business and reputational risk with a more flexible audit planning and a more frequent assessment of risk.

Managing the risk of fraud
Jim Gee, Director, Counter Fraud Services Macintyre Hudson LLP and Chair, Centre for Counter Fraud Studies

Today’s interconnected, complex and increasingly automated financial systems may have reduced the risk of fraud. But they have not eliminated it. Beyond the headline-grabbing cases, such as the 2009 Madoff scandal, there are a considerable number of incidents that have significant cost implications. Central banks are by no means immune to this, and the importance of reputation places a premium on internal procedures and working practices with inbuilt counter-fraud mentalities and disciplines. In this session a leading expert will share his thoughts about how central banks can develop an anti-fraud culture and put an economic cost against the risk of fraud losses

Tuesday 29 June 2010

New Tools and Techniques

Enhancing good governance: the auditing of soft controls
Workshop led by Jeffrey Ridley

It is widely acknowledged by governors, stakeholders and senior management that a central bank’s most important asset is its reputation. Much emphasis is put on the importance of ‘soft’ values, ethics and bank culture, in this way not only can the central bank do the right thing but also be seen to be doing the right thing. Therefore, professional internal auditors will ensure that these soft controls are audited. The course chairman will lead a workshop that focuses on how internal auditors can contribute to the culture and values in their central banks.

The internal auditor’s toolkit
Speaker to be confirmed

Recent years have seen a shift away from internal control to risk-based auditing. Yet in order to provide assurance and consultative services in an efficient and effective manner it is important that the tools and techniques are understood and applied. In this session an experienced internal auditor will outline the ways in which central bank internal auditors can improve their day-to-day effectiveness. The speaker will touch on the key challenges surrounding macro audit planning, micro-audit planning, documenting of information, reporting, quality assurance and audit documentation.

Auditing outsourcing
Hilde Oiseth Nordlid, Senior Advisor, Norges Bank

Norges Bank has for the past 10 years restructured and reduced the number of employees, partly by the outsourcing of non-core business. The objective of the outsourcing was to focus on core business activities, clarify the responsibilities of heads of the business lines and move to a knowledge-based organisation. However, in the process of outsourcing of services the central bank exposes its reputation to a new set of operational risks. In this session a senior advisor at Norges Bank will share her experience of conducting audits and will lead a discussion about how to develop a proactive audit scope for outsourcing projects and the effective audit of service providers and vendors.

Demystifying information systems auditing
John Machin, Partner, KPMG LLP

Internal auditors need to understand the strategic importance of information systems within business operations and management and the principles of information integrity, confidentiality and availability that underpin them. Moreover, in todays reduced-spend environment, technology is increasingly the focus for drives to reduce costs and improve productivity. Yet risk management and control cannot be compromised. In this session a seasoned information systems auditor will facilitate a discussion about the key issues for consideration when planning and delivering an effective audit of IT. This session is set in the context of the unparalleled challenges that have faced financial institutions leading up to and during the financial crisis, and mindful of the speed of response that institutions, including central banks, have had to demonstrate.

Internal audit in recovering markets: doing more with less
Speaker to be confirmed

In order to continue to provide assurance that their central banks are working well it is vital for internal audit departments to be aware of how risk profiles and tolerances are changing. In this session an expert will share his thoughts about the main challenges facing internal auditors in the wider financial marketplace.

Wednesday 30 June 2010

Adding Value Through Internal Audit

Performance measurement
Jana Báčová, Executive Director, Internal Audit, Czech National Bank

One of the most enduring difficulties facing internal auditors is the need to continually demonstrate and communicate to audit committees, management, and internal customers how and where they add value. However, the range and complexity of the audit projects that they carry out makes truly meaningful performance measures difficult to develop and communicate. In this session an experienced internal auditor will critically assess the value of quantitative and qualitative measures in measuring the performance of the internal audit department. Attention will also be paid to how internal auditors can better utilise well known outcome-based metrics such as return on investment (ROI), cost and customer satisfaction.

All change for audit?
Sally Wharton, Head of Audit, Strategy & Projects, Royal Bank of Scotland

In order for internal audit to fully add value it needs to be properly integrated into the business at an enterprise-wide level. However, in the aftermath of a truly global financial crisis there have been seismic changes for all manner of financial institutions which makes it even more of a challenge for internal auditors to deliver their duties. In this session the speaker will share her thoughts about how internal audit departments need to revise their operations in light of the changing environments within which they operate. Discussion will focus on how internal audit may need to expand its remit to see the big picture, enhance its presence at board level, use increasing amounts of judgement when providing assurance and place more reliance on managers better controlling their own functions.

Demonstrating value: internal audit reporting
Julie Champagne
Deputy Chief, Internal Audit, Bank of Canada

With central bank budgets subject to greater scrutiny by management and stakeholders, internal auditors have been challenged to pay special attention to the value that their departments deliver. It has also become increasingly important that internal audit demonstrates its value to internal customers, notably the audit committee and senior management. In this session the speaker will discuss internal audit reports and consider how to ensure that reports matter, that they are relevant and that they have the right breadth and depth. Conclusions will be drawn about how those audited can get value out of internal auditors reports.

Thursday 1 July 2010

Maximising Effectiveness of the Internal Audit Team

Managing and developing internal audit talent
Molefi Nkhabu, Head of Internal Audit Department, South African Reserve Bank

To deliver an effective internal audit the auditor needs a deep understanding of central bank functions and the key risks that they are susceptible to, along with the highest level of technical auditing expertise. This requires a combination of staff with internal knowledge as well as those with externally developed skills, which managers must bring together to work as a dynamic unit. One method to stay abreast of the changes affecting the business they serve is to devote adequate resources to develop ongoing training and development programmes. In this session the speaker will outline how a talent management strategy can be the cornerstone of an effective internal audit department and explain how by implementing such procedures senior internal auditors can demonstrate the value that they add to the bank.

Group discussion: cutting-edge internal auditing
Led by the chairman

The chairman will draw conclusions from the four days of the course and with the delegates develop these into cutting-edge practices for internal auditors for their future roles in central banking. Delegates will be given the opportunity to draw up action plans to take back to their home institution.