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Banking Newsletter - March/April 2014

This edition covers local and global regulatory developments, using social media for customer engagement and the latest in real time payments.

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Banking Newsletter – March/April 2014

A reflection on the Internal Audit function in banks 

Since the release of the Bank for International Settlements’ (BIS) paper on the internal audit function in banks in June 2012, there have been two papers released by the American Federal Reserve Bank (FRB) and the UK’s Institute of Internal Auditors UK (IIA) on the same topic.

The FRB released a ‘Supplement Policy Statement on the Internal Audit Function and its Outsourcing’ in January 2013 which comprises of a number of enhanced internal audit practices in the areas of risk analysis, thematic control issues, challenging management and policy, infrastructure, risk tolerance and governance and strategic objectives.


The IIA released ‘Recommendations from the Committee on Internal Audit Guidance for Financial Services’ in July 2013 which includes a number of recommendations to enhance the overall effectiveness of Internal Audit and its impact within firms operating in the financial services sector.

 

These recommendations are grouped under the following categories: the role and mandate of internal audit, scope and priorities of internal audit, reporting results, interaction with risk management, compliance and finance, independence and authority of internal audit, resources, quality assessment and relationships with regulators.


These international standards, and APRA’s latest prudential standards, CPS 220: Risk Management, all point to a consistent trend of a heightening of expectations by regulators globally with regard to the role of internal audit within financial institutions. 

 

Ed Larkin, Partner with KPMG’s Internal Audit practice, has analysed the significant differences between the BIS paper and the FRB and IIA papers, and APRA’s CPS 220: Risk Management prudential standard.

 

Read Ed's full analysis. 

Internal Audit in Banks: BIS, FRB and IIA (UK) comparison

We analyse the significant differences between the BIS paper and the FRB and IIA papers, and APRA’s CPS 220: Risk Management prudential standard.

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