The Internal Audit Function in Financial Institutions

A pragmatic approach to the internal audit function in financial institutions.

In a fast-changing environment within the financial services’ industry, the Internal Audit function benefits from a unique positioning and influence historically built over the control history of any regulated entity, but is also faced with crucial challenges to adapt to new expectations in terms of adding value to the organisation, avoiding the risk of “too much” and “too little”, contributing to a sound control environment without threatening business initiatives and operational agility.

The methodology of this course is based on theoretical lectures, interactive exchange of experiences, practical exercises and case studies.

In this context, the main objectives of this course are to:

• Better understand the key role of the Internal Audit function in a general governance and oversight structure and its complementary added-value to other external and internal players (Board of directors/ Audit Committee members, Executive Management, Compliance, Risk Management, External Audit and regulators).

• Develop knowledge surrounding the mission of a sound Internal Audit function within the 3 Lines of Defense model (enhancing and protecting organisational value by providing risk-based and objective assurance, advice and insight) to fulfill the latest developments of international standards for the professional practice of Internal Auditing.

• Understand the impact of the regulatory evolution and trends on the Internal Audit function (including its role in Environment, Social and Governance – ESG recent requirements).

• Improve the execution of Internal Audit assignments through maximized use of internal auditing international standards (principle-focused) to reach concrete added-value (results-oriented) for all stakeholders (using the Internal Audit Competency Framework of the Institute of Internal Auditors – IIA).

• Deep dive into proven successful Internal Audit approach and techniques (including standard audit reviews and special assignments, as well as develop and maintain high quality Internal Audit key documentation (Audit Charter, pluri-annual Audit Plan, Audit reports, Audit Committee packages).

• Ensure sound understanding of the different phases to build and monitor an appropriate Internal Audit budget.

• Develop competencies in organising and staffing an Internal Audit department through the required technical and soft skills, attraction, development and retention of Internal Auditors and their future transition to (Management) roles.

• Experiment concrete tools and practices through multiple case studies, real-situations’ role plays, concrete examples, multiple choice quiz, a self-evaluation and key highlights of most commonly audited areas.

• Identify and mitigate the difficulties and challenges faced by the Internal Audit function by leveraging on Do’s and Dont’s and targeting an agile Internal Audit function.

• Governance and oversight in financial institutions

• The roles and responsibilities of external and internal key governing bodies

  • Board of directors/ Audit and Risk Committee(s)

  • Executive Management

  • Internal control functions (Compliance, Risk Management, Internal Audit)

  • External Audit

  • Regulator(s)

• Organisation of the 3 Lines of defense model

  • The Pros and Cons of the model

  • The positioning of the Internal Audit function and its coverage

• Evolution and trends of the regulatory environment surrounding the Internal Audit function

• The role of Internal Audit in Environment, Social and Governance (ESG) evolutions

• Internal Audit international standards 

  • The concepts and key principles

  • Their transposition into operational practices

  • The Internal Audit Competency Framework (Institute of Internal Auditors – IIA)

• The Internal Audit approach

  • The Internal Audit methodology

  • Executing standard Internal Audit reviews (as per Audit Plan)

  • Conducting special Internal Audit assignments (as required)

  • The Internal Audit risk taxonomy and key risk indicators generally used

• The key governing documentation in Internal Audit

  • The Audit Charter

  • The Audit Plan

  • The Internal Audit reports

  • The Audit Committee package

• Building and monitoring an Internal Audit budget

• Organising and staffing an Internal Audit department

  • The required technical skills

  • The necessary soft skills

  • Developing and retaining Internal Auditors

  • Transitioning into a (Management) role after Internal Audit

• Difficulties and challenges faced by Internal Auditors

  • The Do’s and Dont’s

  • The sanctions faced when violating the IIA Code of ethics

  • Agility in Internal Audit: a dream or a possible reality?

• Case study: executing a standard Internal Audit review of the Payments Department

• Case study: conducting a special Internal Audit assignment of a fraudulent case

• Concrete examples and lessons learnt in Internal Audit fieldworks and in Audit Committees

  • Key highlights - Auditing Human Resources;

  • Key highlights - Auditing Finance;

  • Key highlights - Auditing Compliance;

  • Key highlights - Auditing Risk Management;

  • Key highlights - Auditing Legal;

  • Key highlights - Auditing a commercial function;

  • Key highlights - Auditing Facilities/ Corporate Services.

• Role play (4 groups: Audit Committee members, Internal Auditors, Sr Mngt/ Auditees, External Auditors) 

• Multiple-choice quiz

• Final self-evaluation

• Senior Internal Auditors and/ or control functions’ holders (5 years’ experience minimum in a Senior/ Management role within a control function such as Internal Audit, Risk Management, External Audit or Compliance).

• Senior Management representatives (C-level, directors) and Board of Directors (including Audit and Risk Committee members).

• Talented individuals identified to potentially develop their career in an Internal Audit role (capacity building).

• Executives of regulatory bodies in charge of inspections within regulated financial services’ firms.

Mr Samuel Grand, international C-executive, non-executive director and chairman of Audit & Risk Committees, Senior official trainer at ATTF/ House of Training, member of ALRiM, Certified Internal Auditor (CIA) and previously Chief Audit Executive Europe for a large asset management company.