Presentation on theme: "PRESENTATION TO AUDIT COMMITTEE (DATE) ABC BANK. Source: Protiviti KnowledgeLeader 2 Table of Contents I.Introduction of."— Presentation transcript:
PRESENTATION TO AUDIT COMMITTEE (DATE) ABC BANK
Source: Protiviti KnowledgeLeader 2 Table of Contents I.Introduction of Internal and External Audit Teams II.Audit Risk Assessment Process and Audit Plan III.Summary Comparison of Audit Effort in prior year versus Plan for the current year. IV.Internal Audit Schedule V.Sample Audit Committee Deliverable VI.Matrix for Evaluation of Audit Independence
ABC BANK Source: Protiviti KnowledgeLeader 3 Internal Audit Plan - Overview Internal Audit Plan - Overview rThe audit plan was developed using a risk based audit approach. Utilizing experience and understanding of the banks operations as well as industry knowledge, internal audit identified auditable areas, performed a risk assessment for each of these areas, and assigned each of these a risk rating of high, medium or low. rInternal Audit considered the following factors, as well as knowledge of the Bank, in determining the risk rating for each auditable area: 4Discussions with Bank Management which provided insight regarding issues and risks in the auditable areas 4Potential impact that the auditable area may have on the financial position of the Bank 4Other environmental factors, such as past audit results, changes in personnel and operations, past and current emphasis by regulators, and future business strategies rThis risk assessment process will be performed on an ongoing (at least annually) basis to ensure changing risk factors, including losses, operational changes or turnover are continually monitored. rA cycling approach to the internal audit plan was used, whereby high risk areas are audited on an annual basis, and medium to low risk areas are audited over a 18 to 24 month cycle.
ABC BANK Source: Protiviti KnowledgeLeader 4 III IIIIV Pink Pink = High Risk Yellow Yellow = Medium Risk Green Green = Low Risk LIKELIHOOD SIGNIFICANCESIGNIFICANCE Commercial Business Lending Treasury/Investments/ALM Internet Conn./Firewall Central Services SBA Center New Product Development Real Estate Lending ITI Applications Local Area Network Branch Network Commercial Lending Small Business Lending Operations Support Logical Security/Security Admin. Software Licensing Centralized Doc. Unit Disaster Recovery Community Reinvestment Act Loan Administration Dept. Financial Products Appraisal Department Human Resources/Payroll Facilities Finance Marketing/Promotions Credit Administration Risk Map - ABC Bank IT Telecommunications
ABC BANK Source: Protiviti KnowledgeLeader 5 Summary Audit Plan Risk Audit AreaAssessmentBudgeted Hours Treasury/Investments/ALMHigh300 Real Estate LendingHigh250 Central ServicesHigh450 Commercial Business LendingHigh250 SBA CenterHigh250 New Product DevelopmentHigh160 Internet Connectivity/FirewallHigh80 Centralized Documentation UnitMedium450 Logical Security & Security AdminMedium100 Local Area NetworksMedium80 IT TelecommunicationsMedium100 Disaster Recovery PlanningMedium60 Software LiscencingMedium50 Finance/Accounting/Accts PayableMedium250 Operations SupportMedium200 Community Reinvestment ActMedium150 Branch NetworkLow450 Human Resources/PayrollLow150 DiscretionaryN/A400 Planning, Admin & Reporting to ACN/A260 Follow up on prior year Audit planN/A80 Total Budgeted Audit Hours4,520
ABC BANK Source: Protiviti KnowledgeLeader 6 Summary Focus of Audit Effort During Prior and Current Years Hours
ABC BANK Source: Protiviti KnowledgeLeader 7 Significant Changes in Audit Plan from Prior to Current Year As is depicted on the preceding page, the following summarizes the most significant changes seen in the audit plan for this year versus last: Greater emphasis on lending activities, including centralized Greater emphasis on lending activities, including centralized documentation unit, based on risk assessment process documentation unit, based on risk assessment process Significant re-allocation of time from branch network to Significant re-allocation of time from branch network to centralized/back office operational activities based on our risk assessment centralized/back office operational activities based on our risk assessment process. For branch network, focus to be on high risk activities, including process. For branch network, focus to be on high risk activities, including branch losses, wire initiation, among others branch losses, wire initiation, among others Increased discretionary time for special projects Increased discretionary time for special projects Reduced administration time, as well as no allocation for training, Reduced administration time, as well as no allocation for training, vacation, or sick leave vacation, or sick leave
ABC BANK Source: Protiviti KnowledgeLeader 8 Internal Audit Schedule = Planned= In Process= Completed
ABC BANK Source: Protiviti KnowledgeLeader 9 Internal Audit Schedule, continued = Planned= In Process= Completed
ABC BANK Source: Protiviti KnowledgeLeader 10 Federal/State Regulations Reviewed as Part of the Audit Plan Internal Audit Schedule - Regulatory Compliance As part of our review of the identified business processes and retail branches, Internal Audit will integrate compliance testing of the following regulations as follows: Internal Audit will coordinate with ABC Banks Compliance Officer when determining the scope and degree of work to be performed for compliance related issues.