The Federal Reserve has outlined its expectations for an effective board of directors under five categories, including the independence of the internal audit and risk-management functions. The Fed is inviting comment on its proposed guidance, which is intended to supplant the supervision letters the Fed has been using with regard to large financial institutions.
Coronation Merchant Bank CEO Abubakar Jimoh quoted The IIA at an event in Nigeria while exploring the role of financial institutions' internal auditors. Internal auditors must be professionally objective to the greatest extent possible in collecting, assessing and communicating information and must make balanced assessments free of undue influence by others, he said.
FSAC 2017 Exchange Recap The Financial Services Exchange welcomed a record number of attendees at their annual program in September. Over 520 attendees including chief audit executives, audit directors and managers, regulators, and other internal audit experts, discussed the future of regulatory reform. Read the recap. Mark your calendar for next year's Exchange: Oct. 1-2, 2018, in Washington, D.C.
China is strengthening risk-management procedures and oversight for the China Development Bank, the Export-Import Bank of China and the Agricultural Development Bank of China. Safeguards taking effect at the start of the year include mandatory reviews of internal capital adequacy at least once a year.
Stand Out From Your Peers Interested in advancing in the competitive niche of financial services auditing and communicating your breadth of knowledge? Earning your CFSA designation can be your key to demonstrating your competence and distinguishing yourself as an expert.
The Treasury Department has called on the Financial Stability Oversight Council to limit use of the systemically important financial institution designation and to target firms based on financial practices, rather than size. "Our recommendations include enhancing FSOC's analytic process, implementing cost-benefit analysis and increasing transparency," said Treasury Secretary Steven Mnuchin.
Banks will have to make significant changes to comply with the Financial Accounting Standards Board's new standard for credit-loss accounting, which will apply to fiscal years starting after mid-December 2020. The standard, for which many banks are unprepared, could lead to more conservative lending, said James Gellert of RapidRatings, which is assisting banks in complying with the standard.
Federal Reserve Governor Randal Quarles said that as the central bank's vice chairman of supervision, he wants to emphasize overseeing banks and give less attention to issuing rules. And when it is time to change rules, he wants industry input early, rather than asking for comments after a rule has been drafted, Quarles said.
Saudi Arabia has frozen bank accounts containing billions of dollars as part of a crackdown on corruption. The kingdom says it has frozen accounts of individuals but not accounts of companies those individuals manage or own.
FSAC Knowledge Brief: Risk Reporting Practices Internal auditors at banks of all sizes should be aware of the Basel Committee on Banking Supervision's regulation 239 principles and prepare to provide assurance over their ongoing monitoring. Consider these engagement objectives and procedures in customizing an audit program to provide assurance regarding risk reporting practices. Read more.
Machine learning and artificial intelligence are enabling new, powerful forecasting techniques. These technologies, however, can struggle under certain conditions, making it important for users and policymakers to understand their limitations.
An internal audit has concluded the Federal Deposit Insurance Corp.'s lax security measures expose its computer system to lengthy outages and malicious attacks by cybercriminals. The FDIC Office of Inspector General said weak controls have "placed the confidentiality, integrity and availability of the FDIC's information systems and data at risk."
Many financial services organizations have principles for investigations, but fewer say they have processes for discipline and evaluating evidence. Differences exist between large and small internal audit functions. View the details.
Video: Playing in the Gray -- Maintaining Independence
Danny Goldberg, founder of GoldSRD, discusses this delicate balance and how internal audit can stay effective as the third line of defense while assisting as a trusted adviser. Watch now.
It's lack that gives us inspiration.
Ray Bradbury, writer
About the IIA Financial Services Audit Center (FSAC)
FSAC is an IIA specialty center for audit professionals in the banking, asset management, and insurance sectors. FSAC advances the
professional practice of auditing in the financial services industry through
education and training events,
professional guidance, and advocacy. Learn more about
FSAC and how you can
add the center to your IIA membership.