BASEL II: INTERNAL AUDIT'S ROLE IN ACHIEVING ... - MIS Training

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EARN 15 CPE CREDITS
BASEL II: INTERNAL AUDIT'S
ROLE IN ACHIEVING
COMPLIANCE
An overview of Basel II, it's key elements and how they will impact the Internal Audit and Risk
Management functions within financial institutions
“A proactive and challenging overview of
Basel II, which sets out the issues facing
the auditor”
Group Manager, Capital One
4th - 5th December 2006, London
COURSE DIRECTOR:
Dr David Bobker
MA, DPhil, ACA
Work through the Basel II framework for
capital standards and how they impact
internal audit
Cover key elements of market, credit and
operational risk considering the role of
internal audit
Explore how audit can contribute most
effectively and add value to your banks
Basel II implementation
Put together an Internal Audit Programme
to ensure compliance
PLEASE VISIT OUR NEW WEBSITE AT WWW.MISTIEUROPE.COM

SEMINAR
FOCUS AND FEATURES
Basel II: Internal Audit’s
Role in Achieving
Compliance
6th - 8th December 2006
London
It is estimated that banks worldwide
are going to spend around 50 billion
dollars implementing Basel II, mainly
by introducing huge new systems,
new infrastructure and armies of new
risk managers to help monitor and
manage risk. Since the more
definitive division of active risk
management has come from internal
audit over recent years, it is important
that internal auditors are clear about
the critical role they need to play in all
of the current frenetic activity and are
able to communicate this effectively
to the rest of the bank.
This 2-day course works through the
basic framework of the new Capital
Accord from the point of view of a
bank internal auditor facing the Basel
challenge. Each of the key elements
of market, credit and operational risk
is examined and the internal auditor's
role is considered. The course
concludes with a review of the Basel
approach to internal audit and the
corporate governance of banks to
help the participants clarify in their
own minds how to contribute most
effectively to the success of their
institutions.
Prerequisite
Fundamentals of Internal Auditing
Learning Level
Basic
Fee
GBP £1,095
Earn 15 CPE’s
Who Should Attend
Internal, IT and External Auditors and
Risk Managers from financial
institutions
DAY ONE
Overview of the Basel Capital
Accord
■ The three pillars
■ The capital calculation
■ Market, credit and operational
risk
The Basel Principles of Internal
Audit
■ The 20 Basel Principles
■ Internal audit in practice
■ Internal audit and corporate
governance
■ Relations with the external
auditor and the regulator
■ Relations with risk managers and
the compliance officer
■ Competence to audit Basel 2
■ Dilemmas and possible solutions
Key Basel Governance Principles
■ Responsibilities of Board
■ Key Committees – Audit
Committee, Risk Committee
■ Independent risk management
function
■ Key qualitative standards for risk
management
■ FSA requirements – capital
assessment system
■ The other Basel papers:
Operational Risk, Interest Rate
Risk, Credit Risk, Market Risk
Operational Risk
■ The three approaches: BIA,TSA,
AMA
■ Business line classification
■ Qualitative requirements for TSA
■ Introduction to AMA
■ The role of internal audit
The Advanced Measurement
Approach
■ Fundamentals of quantitative risk
measurement
■ The four elements
■ Business environment
■ Internal and external data
■ Scenario analysis
■ The AMA soundness standard
■ Problems and issues with the
AMA
■ Internal audit and the use of
specialists
Event Databases
■ Use and misuse of event data
■ Key requirements
■ The main data fields
■ The importance of establishing
causality
DAY TWO
Credit Risk
■ Understanding credit risk
■ Assessment of individual credits
■ Off balance sheet items
■ Loan portfolio analysis
■ The standardized capital
calculation
■ The Internal Ratings Basis
■ Pre-conditions for use of IRB
■ Credit risk governance
■ Internal audit
“High level
introduction to
Basel II and
overview of Risk
Management”
Internal Auditor, Investec Ltd
Market Risk
■ Types of instruments
■ Types of market risk
■ Treasury/back book vs the
trading book
■ Interest rate risk management
■ Value At Risk and capital
calculations
■ Market risk governance – the
Middle Office
■ Internal audit’s role

COURSE
DIRECTOR
Economic Capital and Regulatory
Capital
■ Risk Adjusted Performance
Measures
■ Economic capital and risk
appetite – subjective aspects
■ RAROC, RARORAC
■ The problems of capital allocation
■ The bank’s risk policies
Pillar 2 Supervisory Review and
Corporate Governance
■ The four Basel principles of
supervisory review
■ Assessment of capital adequacy
■ Supervisory review
■ Additional capital requirements
■ Supervisory intervention
■ The bank’s response
■ Internal capital assessment
processes
■ Internal audit review of capital
assessment
■ Benchmarking implementation
■ Minimum qualitative standards
■ Governance structures
■ Expert review of advanced
approach models (AMA, IRB,
Market Risk)
■ FSA’s approach to internal audit
involvement
Dr David Bobker, MA, DPhil, ACA
After completing a DPhil in mathematics at
Oxford University, David worked as a manager
in a small, diverse, banking and property
company in London. He left the company to
train as a chartered accountant with Peat
Marwick Mitchell (KPMG) specialising in the
insurance industry and statistical auditing. He
later moved to Touche Ross, where he provided
regulatory compliance advice mainly to
wholesale banks and broker dealers.
In 1989 David was seconded to the Building
Societies Commission as a Supervisor. He had
policy responsibility for capital adequacy which
included UK implementation of European capital
adequacy rules and new rules on capital
instruments for building societies. After leaving
the Commission he moved into the internal
audit profession at Alliance & Leicester where
he was Head of Group Audit and Group
Compliance Officer for 7 years. In order to
provide a more soundly based internal audit
service he developed specialist audit software
to ensure fully concise, logical analysis
underpinned all internal audits.
In 1998 he moved to Norwich Union as Head of
Group Internal Audit. His responsibilities during
those years included pioneering work on
implementing corporate governance
arrangements and “enterprise risk
management”, what became later Turnbull
compliant systems. Involving systems of risk
identification and assessment, effectiveness of
controls and compliance processes together
with appropriate corporate reporting systems for
the board and audit committee.
David set up Real Assurance in 2001 helping
clients move towards best practice in quantified
risk management systems (especially for
banking industry implementing Basel 2),
corporate governance and compliance.
Putting Together an Internal Audit
Programme
■ Internal Audit’s overall role
■ Risk based analysis of Basel 2
compliance
■ Internal audit policy

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Basel II: Internal Audit’s
Role in Achieving
Compliance
(please photocopy form for additional delegates)
4th - 5th December 2006, London
(MT2015)
GBP £1,095 £
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