The Basel Committee’s paper on internal audit issued in August 2001 is one of the most significant documents for bank auditors and supervisors published in recent years. Effectively, in its 20 principles of best practice, it establishes international standards for bank internal auditing.  Around the world, central banks and other regulators are revising their requirements for bank internal audit, developing guidance and establishing means for monitoring compliance.  Recent scandals such as the AIB “rogue trader” affair have highlighted once more the need for an effective independent evaluation of a bank’s safeguards against losses and malpractice, and have concentrated supervisors’ minds on the importance of the audit function.  But a modern, proactive and properly resourced internal audit unit can make a valuable contribution in many more ways than this, including helping  the board and senior management discharge their responsibilities for governance,  control evaluation and risk management as specified in this and other Basel papers.

Many banks have now reviewed their internal audit policies and practices against the Basel requirements - some with CATS’ help. 

One service we have developed is our seminar on “Understanding and Implementing the Basel Internal Audit Principles”.  The seminar itself normally lasts one day, and provides an authoritative briefing for managers, supervisors and auditors on the 20 principles contained in the guidance, and on related Basel papers on operational risk, control frameworks, and corporate governance, also taking into account the new Accord and the requirements for ensuring capital adequacy.

Following the contents of the paper, the seminar addresses the following topics: 

	the Bank for International Settlements and the role of the Basel Committee for Banking Supervision
	best practice papers on internal audit, control frameworks, risk management, operational risk and corporate governance
	relationship with requirements for capital adequacy and other international concerns
	responsibilities: of supervisors and regulators, boards, senior management, internal audit, compliance officers and others
	evaluating the environment, arrangements and work of an internal audit function
	the board’s responsibility for effective control
	senior management’s responsibilities for developing, maintaining, reviewing and reporting on control systems
	the definition, nature, role and contribution of internal audit; responsibilities and practices in relation to control assurance, risk management and governance; audit and consulting
	fundamental principles of internal audit: achieving independence, re-examining audit’s charter, maintaining impartiality, ensuring professional competence; determining audit’s scope
	functioning of internal audit: working methods, the meaning and implications of a risk-based approach, effective planning
	managing the function; ensuring conformance with professional standards, eg IIA relationships with supervisors, external audit and other parties
	audit committees
	the pros and cons of outsourcing
	other issues, eg whistleblowing
	ensuring compliance: actions by supervisors, preparing Internal Audit Development Plans

The seminar aims to: 

1. ensure understanding of the Basel requirements

2. provide authoritative interpretation and analysis of their meaning and implications

3. examine other relevant aspects of international best practice, including the new IIA Standards, endorsed by the Basel paper

4. give guidance on reviewing existing arrangements and achieving compliance

5. address the practicalities of putting the Basel principles into operation

6. examine the respective roles of supervisors, auditors, management and others in this process

An optional extra day is offered as a workshop which allows time for a more detailed consideration of the many issues raised by the Basel requirements, and what they mean in practice, including: 

	external and internal assessments of internal audit arrangements
	complying with international standards
	detailed examination of audit’s role in risk management and governance issues
	adopting a risk-based approach to audit work
	using innovative means of control evaluation such as control self-assessment, risk workshops, etc
	ensuring the basic requirements are met for controls assurance
	working with the board and senior management in helping them to discharge their control review and reporting responsibilities
	using control frameworks such as COSO, CoCo, Turnbull etc
	getting the most out of limited audit resources
	building effective working relationships between supervisors and auditors

For more information, including venues, dates and prices, email CATS at train@catsint.co.uk or phone us on +44 (0) 1732 760216, fax +44 (0) 1732 763716