Introduction:

 The Sector-Specific Auditing Practices for Banking training course is designed to provide auditors with the specialized skills and knowledge necessary to audit banking institutions effectively. Given the highly regulated nature of the banking industry, auditors must navigate complex regulatory requirements, operational risks, financial controls, and cybersecurity threats. This course covers key banking-specific auditing practices, including compliance with banking regulations, risk assessment, anti-money laundering (AML) practices, credit and operational risk audits, and best practices for ensuring robust internal controls. Participants will gain the expertise required to conduct thorough audits that safeguard the institution’s financial stability, operational efficiency, and compliance posture.

Objectives:

• Understand the unique aspects of auditing within the banking sector, including regulatory, operational, and financial requirements.
• Gain proficiency in banking-specific regulatory frameworks, such as Basel III, AML/KYC, and SOX.
• Learn to assess key banking risks, including credit risk, liquidity risk, operational risk, and cybersecurity.
• Develop skills in evaluating banking operations, financial controls, and compliance frameworks.
• Strengthen communication skills to effectively report and present audit findings to stakeholders.

Who Should Attend? This course is ideal for:

• Internal auditors, external auditors, and compliance officers in banking institutions.
• Risk managers and financial controllers involved in overseeing banking operations.
• Compliance and regulatory officers responsible for AML, KYC, and financial reporting requirements.
• Professionals in auditing, risk, or compliance roles who wish to specialize in banking sector audits.
• Executives and managers in the banking sector seeking to improve their understanding of sector-specific audit practices.

Day 1: Foundations of Banking Auditing

• Introduction to Banking Auditing: Purpose, scope, and unique aspects of audits in the banking industry.
• Banking Regulatory Landscape: Overview of key banking regulations, including Basel III, AML/KYC, SOX, and Dodd-Frank.
• Types of Audits in Banking: Compliance audits, operational audits, financial audits, IT/cybersecurity audits, and credit risk audits.
• Audit Planning for Banks: Establishing scope, objectives, and priorities for banking audits.
• Workshop: Case study on defining scope and objectives for an audit in a sample banking institution.

Day 2: Regulatory Compliance and Risk Management in Banking

• Regulatory Compliance Frameworks: Understanding AML, KYC, and OFAC compliance requirements.
• Credit Risk and Liquidity Risk Assessment: Evaluating loan portfolios, credit risk management, and liquidity risk.
• Operational Risk in Banking: Assessing operational risk management frameworks, including controls over processes, staffing, and customer transactions.
• Cybersecurity and Data Protection in Banking: Overview of cybersecurity standards and data protection regulations (e.g., GDPR).
• Practical Exercise: Conducting a compliance and risk assessment for a hypothetical bank’s credit operations.

Day 3: Anti-Money Laundering (AML) and Fraud Detection

• Introduction to AML Auditing: Understanding AML controls, KYC requirements, and reporting obligations.
• Fraud Detection and Prevention in Banking: Techniques for identifying fraud, including red flags and transaction monitoring.
• Evaluating AML Programs and Controls: Assessing internal policies and procedures for AML compliance.
• Transaction Testing for AML: Techniques for sampling and testing transactions to detect suspicious activities.
• Hands-on Lab: Conducting a mock AML audit, including transaction testing and assessment of KYC practices.

Day 4: Operational and Financial Controls in Banking

• Evaluating Financial Controls: Auditing controls over financial reporting, including SOX compliance and internal controls over financial reporting (ICFR).
• Credit and Loan Auditing: Assessing credit underwriting, loan approval processes, and monitoring of loan performance.
• Revenue and Expense Audits: Techniques for auditing revenue recognition, expense management, and profit margin.
• Data Analytics for Banking Audits: Using data analytics for risk identification, trend analysis, and fraud detection.
• Practical Exercise: Using data analytics to assess loan portfolio risks and operational performance metrics in a banking scenario.

Day 5: Reporting, Communication, and Continuous Improvement in Banking Audits

• Preparing the Banking Audit Report: Structuring audit reports to highlight key compliance and risk findings.
• Presenting Audit Findings to Stakeholders: Techniques for communicating audit results to banking management and regulatory bodies.
• Corrective Action and Follow-Up: Developing action plans to address audit findings and ensure compliance.
• Continuous Improvement in Banking Audits: Best practices for enhancing audit processes, technology use, and risk monitoring.
• Final Workshop: Preparing and presenting a comprehensive audit report for a banking institution based on a simulated case study.

Conclusion and Assessment: Participants will complete a final assessment to demonstrate their understanding of banking-specific auditing practices. A feedback session will allow for discussion, reflection on key takeaways, and actionable steps for applying sector-specific audit skills within their banking organizations.