Auditing Asset Management - MIS Training

The Global Leader In
Audit and Information Security Training
Auditing
Asset
Management
Key issues relating to risk control and
internal audit of asset management
4 DAY COURSE:
28 - 31 August 2012
London
Internal Audit
Course Director
John Porter BA ACA
John Porter, is a chartered accountant,
banker and financial services consultant
specialising in internal audit, with more
than 20 years experience in these fields
‘Very informative,
pitched at the right level
and covered all its
objectives’
Prudential
■ Understanding the key issues relating to risk, control
and the internal audit of asset management
■ Understand the key risks within the asset management
industry and the nature of the controls that are applied
in practice
■ Develop practical internal audit approaches to the
management of the business and for each asset class
that can be applied directly to your institution
■ Design a series of internal audit programmes to meet
the demands of this complex audit area
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Register Online at:
www.mistieurope.com/training
Quoting Code:
IA120808-W

Course focus and features
Auditing Asset
Management
Key issues relating to risk control and
internal audit of asset management
The asset management industry has been fast growing and
increasing in its complexity and variety. As at end
September 2008 the European fund management industry
alone had some $4,000 bn of assets under management.
The implementation of Basel II and the recent credit crisis
have put the importance of control and management within
the industry into an increasingly strong focus.
Internal audit functions are required to address the key risks and
controls operating throughout an institution, including those
applying within the asset management industry. This course looks
systematically at the application of control to the risks applying
within asset management and considers the approach that
internal auditors should adopt when conducting such an
assignment.
The objectives of this course are to enable attendees to
appreciate the key issues that arise in practice when undertaking
the internal audit of asset management; to ensure that the internal
auditors focus on the areas of greatest risk and that they develop
practical solutions to the challenges that they face. Using a series
of practical case studies the participants will develop key
approaches that can be applied directly to their institutions.
Course Director
John Porter, BA ACA
John Porter, is a chartered accountant, banker and financial
services consultant specialising in internal audit, with more than 20
years’ experience in these fields. John has held various
management positions within the internal audit departments of the
global financial institutions ABN AMRO, HSBC, American Express
and Bank of Bermuda, having gained his Chartered Accountancy
qualification (UK ICAEW) with Ernst & Young.
His areas of expertise include:
The audit of a wide variety of financial products and derivatives,
including Equities, Bonds/Fixed Income, FX, Corporate Finance, Private
Equity/Venture Capital, Asset Management, Insurance, Trust and Credit
Cards. (John’s Asset Management experience includes audit and
account management responsibilities for the London-based Investment
Management Division of HSBC Asset Management, and the
fundamental re-engineering of the conduct of this Division in liaison with
management and regulators.)
The audit of support functions for retail banking, investment banking
and credit card operations, in particular Risk Management,
Operations/Settlement, Finance, Treasury, Asset & Liability
Management, Tax, Human Resources, Legal and Compliance.
Underpinning the conduct of product and support function audits,
supporting the audit process itself, he is an expert in many aspects
of internal audit methodology, including the following:
• The risk-based planning process (from set up of the risk-ranked
Audit Universe to monitoring the execution of the Annual Audit
Plan against budget)
• Audit report and issue tracking methodology, the escalation
process, and influencing the “tone at the top”
• Evaluation of the effectiveness of the audit process
• Effective auditing techniques and methodologies
• Effective report writing and other communication skills
• Knowledge management methodology
• Roll out of the Institute of Internal Auditors Professional Practices
Framework
• Roll out of a Code of Ethics.
John is an Associate of the Institute of Chartered Accountants in
England & Wales (ACA) and holds a BA Honours degree in History
from Bristol University. Based in Amsterdam, he speaks fluent
English and is proficient in Dutch.
Learning objectives
This course is designed to provide the course participants with an
understanding as to the key internal audit issues that exist within
asset management. The programme will concentrate on the main
asset types; equity (listed and unlisted), fixed income and
property, whilst referring to other available asset types. By the end
of the course delegates will have built a series of audit
programmes suitable to enable them to audit an asset
management operation and will have provided attendees with
increased awareness of the key issues and controls that are
applied in practice.
Who Should Attend
This courses specifically designed for employees who are required
to conduct internal audit assignments within asset management.
Methodology
Combined classroom lecturing and practical workshop style
learning environment will deliver impacting results of knowledge
retention and application. This will be supplemented by case
studies, exercises and role playing where appropriate.
Prerequisite
Some knowledge of internal audit techniques and banking
terminology would be an advantage.
Advanced Preparation: None
Training Type: Group-Live
Learning Level: Intermediate
Price: GBP £2,845
CPEs: 30
Telephone:
+44 (0)20 7779 8454
Email:
training@mistieurope.com

Day One:
Tuesday 28th August
The general asset
management control environment
• Structure and roles in an asset
management firm
• Types of funds and how this changes risk
• General introduction to investment asset types
and associated risk
• Introduction to asset allocation and how this
mitigates risk
• Introduction to benchmarks and performance
evaluation
• Identification of controls
• Identification of risks and risk register
• Introduction to process modelling
• Introduction to key risk indicators and the
balanced scorecard
• Introduction to transaction investigation
procedures
• What can go wrong in asset management
• Introduction to control and risk self assessment
• Loss data and operational risk
Case study: What information is of greatest
importance to the internal auditor? What should be
requested in advance?
Case study: Develop a pre-audit planning document
suitable for an asset management audit
Acquiring a client
• Controls over new clients
• Risks associated with client take on procedures
• What information should be maintained to
demonstrate KYC?
• How can you keep this up to date?
• How can you audit the client agreement?
• How should client suitability be documented
• The moral vs actual risk dilemma
Case study: Develop an audit programme suitable
to audit the acquisition process and also for ongoing
review of existing relationships
Day Two
Wednesday 29th August
Quoted equity investment
• The risk associated with acquiring securities
• The risks associated with managing securities
• Risk associated with corporate actions
• Pricing of quoted equity investment
• Risks associated with international equity markets
• What is tracking error
• Controls over equity valuation techniques
• Financial statement analysis
• Ratio analysis
• The selection of the benchmark
• The role of middle and back office
• Securities lending
Case study: Develop an audit programme suitable
for the audit of quoted equity investments
Case study: Develop an audit programme suitable
for the audit securities lending
Day Three:
Thursday 30th August
Quoted fixed income
investment
• The risk associated with acquiring and disposing
of fixed income securities
• The use of ratings with pricing of fixed income
securities
• Risk and controls within the corporate fixed
income processing
• Risks associated with government securities
• How to use sovereign risk ratings
• The valuation of government securities
• Risk and controls within sovereign bond
processing
Case study: Develop an audit programme suitable
for the audit of quoted fixed income investments
The risk management of
alternative investments
• What are alternative investments
– Structured products risks and returns
• Hedge funds
– What is a hedge fund
– Risks and controls
• Venture capital
– Valuation issues
– Risk and control
• Private equity / angel finance
– What is private equity?
– Risks and controls
• The use of derivatives in asset management –
OTC vs ETD
– Types of derivatives used in asset management
– Future
– Options
• Risks and controls associated with derivatives,
including documentation, valuation and reporting
issues
Case study: Develop an audit programme suitable
for the audit of alternative investments
Day Four:
Friday 31st August
Money market funds
• Role in asset management
• Asset and liability management
• Portfolio Liquidity
• Asset diversification
• Key risks and controls
Case study: Develop an audit programme suitable
for the audit of money markets funds
The risks in asset location &
portfolio management
• Asset allocation and risk management
• Use of historical data
• Client suitability
• Risks and controls
• Tactical asset allocation
• Risks associated with core and satellite
• Risk and controls
Case study: Develop an audit programme suitable
for the audit of asset allocation and portfolio
management
The risks in outsourcing and the
selection and management of third
parties
• The selection process
• The service level agreement and other contracting
issues
• The testing phase
• Key performance indicators
• Risks and controls
Case study: Develop a audit programme suitable for
the audit of outsourced relationships
Other matters
• Reporting to senior management
– Escalation based reporting
– Risks and controls
• Reporting performance
– The client report
– Standards of reporting
– Risks and controls
• Risk issues in pensions fund management
– The role of the pension trustee
– Asset & liability management in a pension fund
– Risk and controls
• Credit risk
– Counterparty credit risk
– Use of limits
– Central counterparties
– Risks and controls
• Scenario Modelling
– How to use scenario modelling in asset
management
• Stress testing and sensitivity analysis
– How to use stress testing and sensitivity
analysis in asset management
Case study: Discuss how to audit stress testing and
scenario analysis
Case study: Develop an audit programme suitable
for the audit of counterparty credit analysis
Case study: Develop an audit programme suitable
for the audit of the reporting of asset management
Register Online at:
www.mistieurope.com/training
Quoting Code:
IA120808-W

The Global Leader In
Audit and Information Security Training
Auditing Asset
Management
Key issues relating to risk control and
internal audit of asset management
Register Online at: www.mistieurope.com/training
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LONDON
28 - 31 AUGUST 2012
PRICE GBP £2,845+VAT
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course notes, lunch and refreshments and a
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