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Risk Based Internal Auditing (RBIA)

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The Institute of Internal Auditors defines Risk Based Internal Auditing (RBIA) as a methodology that links internal auditing to an organization’s overall risk management framework. RBIA allows internal audit to provide assurance to the board that risk management processes are managing risks effectively, in relation to the risk appetite.

Event Type:
Conference/Seminar
Date:
Apr. 2-3, 2020
Location:
Sydney , Australia

But every organization is different. There are different attitudes to risk, different management and organizational structures, different processes and procedures, and the need to subscribe to and comply with different conventions and regulations. Experienced internal auditors need to adapt these ideas to the structures, processes and language of their organization in order to implement RBIA.

Implemented correctly, RBIA offers tremendous advantages to the organization. RBIA allows internal audit to provide the Board of Directors with the assurance that it needs on three areas:

  • Risk management processes - their design and how well they are working
  • Management of those risks classified as 'key' - including the effectiveness of the controls and other responses to them
  • Complete, accurate and appropriate reporting and classification of risks

By using the RBIA approach, the organization’s internal audit should be able to conclude that:

  • Management has identified, assessed and responded to risks within and beyond the organization’s risk appetite
  • That the responses to risks are effective but not excessive in managing inherent risks within this risk appetite
  • Where residual risks are not in line with the risk appetite, action is being taken to remedy this
  • Risk management processes, including the effectiveness of responses and the completion of actions, are being monitored by management to ensure they continue to operate effectively
  • Risks, responses and actions are being properly classified and reported.

This practical hands-on training course is designed for professionals from industry, financial institutions and risk intensive organizations. The following job titles/ positions will benefit from attending:

  • Board members, especially risk and audit committee chairs and members
  • Chief Risk Officers
  • Heads of market, credit, and operational risk
  • Head of Risk Management
  • Chief Compliance Officers
  • Chief Audit Officers
  • Chief Financial Officers
  • Actuaries
  • Treasurers
  • Auditors (External & Internal)
  • Bank regulators and examiners
  • Risk management consultants

  • Auditing: 6 CPE Credits
  • Specialized Knowledge and Applications: 5 CPE Credits
  • Communications: 2.5 CPE Credits
  • Behavioral Ethics: 2.5 CPE Credits
  • Business Management and Organization: 2 CPE Credits
  • Management Advisory Services: 2 CPE Credits
  • Total CPE credits earned in this seminar: 20 CPE Credits

Program Delivery Method: Group-Live
Program Level: Intermediate
Advance Preparation/Program Prerequisites: Experience in Traditional Auditing

Day 01(8:30 AM - 4:30 PM)
  • Registration Process: 8:30 AM - 9:00 AM
  • Session Start: 9:00 AM
  • What is Risk Based Internal Auditing?
    • An introduction to Risk Based Internal Auditing
    • Traditional Approach versus Risk Based internal approach
    • Stages of Risk Based Internal Auditing
    • Measuring the effectiveness of Risk Based Internal Auditing
  • Risk Based Internal Auditing – Background
    • Rationale behind Risk Based Internal Auditing
    • Internal Audit – Definitions, Objectives & Scope
    • The “Expectations Gap”
    • The RISK BASED Internal Audit
    • Comparison to the traditional approach
  • Risk Management Understanding Risk
    • The meaning of risk
    • The attributes of risk – Likelihood & Consequence
    • The Risk Heat Map
    • Audit risk
    • Business risks – classification, internal & external, controllable & non-controllable
    • The COSO risk management framework
  • Understanding COSO
    • COSO — An Integrated Risk Management Framework
    • The COSO ERM Framework
    • COSO in Finer Detail
    • Updates to COSO
  • Basic concepts of risk management
    • Risk capacity, risk appetite, risk response
    • Inherent & residual risk
    • Entity risk assessment & Business process risk assessment
    • Significant risk
    • Risk register
  • ERM – Enterprise Wide Risk Management
    • ERM and the Board of Directors
    • What is covered under ERM
  • Risk Maturity
    • What is risk maturity
    • Why it is important
    • Risk maturity levels
    • Scorecard for assessing risk maturity
    • Analyzing the risk maturity results
  • Using a Risk Based Internal Audit (RBIA) Methodology
    • Audit is of management of risks and not of risk
    • Key reporting areas in the management of risks
    • Documenting Board assurance requirements and risk appetite
    • Audit strategy & risk maturity
    • Selecting individual risks to audit
    • Frequency of coverage
    • Including the Risks into an Audit Assignment
    • Importance of selecting the right auditable unit
Day 02(8:30 AM - 4:30 PM)
    • Stages of RBIA
      • Assessing risk maturity
      • Preparing the audit plan
      • Conducting the assurance audit
      • Reporting to the appropriate level
    • Model Process for Assessing & Evaluating Risks
      • Risk assessment steps
      • Risk assessment tools
      • Risk identification
      • Business Activities that are Sources of Risk
      • Operational Risk and its categories
      • Risk identification methods
      • Industry risk models
      • Choosing which methods to use
      • Typical risk areas
      • Risk estimation (Risk measurement/ Risk scoring)
      • Risk evaluation
      • Risk Heat map & Actions Needed
      • Using risk scores
    • Risk Assessment Tools
      • Market survey
      • Dependency modeling
      • SWOT analyses
      • Event tree analysis
      • BPEST (Business, Political, Economical, Social & Technological)
      • Fault tree analysis (Root Cause Analysis)
      • FEMA (Failure Mode and Effect Analysis)
    • Internal Audit Process

      In this section the instructor will cover the complete Internal Audit Process through with the RBIA methodology is carried out in a consistent manner. This covers the need for the Internal Auditor to become acquainted with the business and the industry allowing him to assess the risk maturity which determines his/her ability to provide the PBIA assurance and to review the risk assessment done by management and the her/his conclusion whether this risk register may be relied upon.

      The process covered includes;

      • Strategic analysis
      • Enterprise risk assessment
      • Internal Audit Plan development
      • What Risks to Audit – An Alternative Approach
      • Internal Audit execution
      • The Process Risk Matrix
      • Reporting
      • Issue Resolution tracking
    • Case Study - How the RBIA methodology is applied.

This is an illustrative case study showing how the RBIA methodology is applied in a real world environment.

    • Comparing the Two Methodologies

      The speaker will compare RBIA methodology to the regular audit methodology. These methodologies will be examine in terms of;

      • Managing risk
      • Setting responsibility for risk management, and
      • Usefulness to the Board of Directors
    • Risk Registers

      The speaker will examine and discuss examples of the RBIA documentation form the case study including;

      • Risk Register
      • Audit Procedures and
      • Transaction Files.
    • Closing Discussion - Difficulties facing the Internal Auditor

The instructor will examine and discuss some of the pitfalls that the Internal Auditor may face in his/her assignment and some potential solutions.

Richard holds a B.S. in International Business Administration from San Jose State University in California. His professional experience spans over 30 years. The first 5 years were spent with Wells Fargo Bank. Another 5 were spent honing his global banking skills, when Richard was intimately involved with International Trade Finance, Real Time Gross Settlement and International Payments, Cross Border Banking.

Richard then repositioned into the private and high-tech sectors providing high-level consulting services, business analysis, project management and training to a wide range of banking clientele across the globe.

He has spent extensive time servicing a diversity of corporates and “financial institutional” clients, in China, Singapore, Hong Kong, Philippines, Korea, Malawi, Ghana, Nigeria, Kenya, South Africa, Poland, Sweden, Ireland, Netherlands, Greece, United Kingdom, Norway, Georgia, Bermuda and across North America. Clients that Richard has trained & consulted to include with such notable firms as ANZ Bank, AIB Bank, Eurobank, ABSA Bank, CitiBank, Swedbank, IBM, Montran and Fundtech, as well as many others.

Richard has also filled the role of advisor to ministries of finance, central banks on risk management, corporate governance, cash management, payment systems and technical payment and risk issues. Furthermore, key staff members from the Georgia Ministry of Finance, Bank of England, South African Reserve Bank, Central Bank of Ireland, Bank Indonesia, European Central Bank, Norgesbank, Central Bank of Kenya, Central Bank of Tanzania and Bank of Portugal have attended training sessions presented by Richard.

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