ABC BANK PRESENTATION TO AUDIT COMMITTEE DATE Table
ABC BANK PRESENTATION TO AUDIT COMMITTEE (DATE)
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 2 ABC BANK Source: Protiviti Knowledge. Leader http: //www. knowledgeleader. com
Internal Audit Plan - Overview r The audit plan was developed using a risk based audit approach. Utilizing experience and understanding of the bank’s 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. r Internal Audit considered the following factors, as well as knowledge of the Bank, in determining the risk rating for each auditable area: 4 Discussions with Bank Management which provided insight regarding issues and risks in the auditable areas 4 Potential impact that the auditable area may have on the financial position of the Bank 4 Other environmental factors, such as past audit results, changes in personnel and operations, past and current emphasis by regulators, and future business strategies r This 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. r A 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. 3 ABC BANK Source: Protiviti Knowledge. Leader http: //www. knowledgeleader. com
Risk Map - ABC Bank Disaster Recovery S I G N I F I C A N C E Logical Security/Security Admin. Commercial Lending Community Reinvestment Act Local Area Network Treasury/Investments/ALM Centralized Doc. Unit Central Services IT Telecommunications Finance Software Licensing Commercial Business Lending Internet Conn. /Firewall Operations Support SBA Center New Product Development ITI Applications II Small Business Lending Branch Network I Real Estate Lending Human Resources/Payroll Loan Administration Dept. Credit Administration Financial Products Appraisal Department Marketing/Promotions IV Facilities III Pink = High Risk Yellow = Medium Risk Green = Low Risk LIKELIHOOD ABC BANK 4 Source: Protiviti Knowledge. Leader http: //www. knowledgeleader. com
Summary Audit Plan Audit Area Treasury/Investments/ALM Real Estate Lending Central Services Commercial Business Lending SBA Center New Product Development Internet Connectivity/Firewall Centralized Documentation Unit Logical Security & Security Admin Local Area Networks IT Telecommunications Disaster Recovery Planning Software Liscencing Finance/Accounting/Accts Payable Operations Support Community Reinvestment Act Branch Network Human Resources/Payroll Discretionary Planning, Admin & Reporting to AC Follow up on prior year Audit plan Risk Assessment High High Medium Medium Medium Low N/A N/A Budgeted Hours 300 250 450 250 160 80 450 100 80 100 60 50 200 150 450 150 400 260 80 Total Budgeted Audit Hours 4, 520 5 ABC BANK Source: Protiviti Knowledge. Leader http: //www. knowledgeleader. com
Summary Focus of Audit Effort During Prior and Current Years Hours 6 ABC BANK Source: Protiviti Knowledge. Leader http: //www. knowledgeleader. com
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 documentation unit, based on risk assessment process • Significant re-allocation of time from branch network to centralized/back office operational activities based on our risk assessment process. For branch network, focus to be on high risk activities, including branch losses, wire initiation, among others • Increased discretionary time for special projects • Reduced administration time, as well as no allocation for training, vacation, or sick leave 7 ABC BANK Source: Protiviti Knowledge. Leader http: //www. knowledgeleader. com
Internal Audit Schedule = Planned ABC BANK = In Process = Completed Source: Protiviti Knowledge. Leader http: //www. knowledgeleader. com 8
Internal Audit Schedule, continued = Planned ABC BANK = In Process = Completed Source: Protiviti Knowledge. Leader http: //www. knowledgeleader. com 9
Internal Audit Schedule - Regulatory Compliance Federal/State Regulations Reviewed as Part of the Audit Plan 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 Bank’s Compliance Officer when determining the scope and degree of work to be performed for compliance related issues. ABC BANK Source: Protiviti Knowledge. Leader http: //www. knowledgeleader. com 1 0
- Slides: 10