Audit (A)

1. BASEL II - OPERATIONAL RISK MANAGEMENT

Risks are inherent in financial transaction and banks are exposed to risk in their working environment. Operational risks are part of banks overall risk management policy and cannot be left in isolation. Investment in technology keeps on growing in banks which along with bringing benefits has risks embedded within. Detection and prevention can reduce or even eliminate risks.

With Basel II in force, banks and specially auditors need to know, detect and devise ways to develop mechanism to guard against risks drawing close more than 100 countries' banking systems are preparing for its implementation.

One key area to be addressed is Operational Risk and this Program will assist participants in ensuring their banks meet the relevant criteria.

OBJECTIVES
This Program will help participants to:

	Provide participants with the latest information regarding Basel II - Operational Risk
	Give an in-depth understanding of the practical issues which the local banks face
	Enable participants to identify, monitor and control key risk areas in operations
	Know the different methods for detecting and controlling losses and fraud
	Prepare workable action plans to check compliance with the relevant best practices

CONTENTS

	Defining 'Operational Risk' within Basel II Pillars
	Operational Risk Management (ORM) strategies (sound practices for the management of ORM)
	Self assessment process
	Key Risk Indicators (KRI), identify Risk
	Loss event analysis Processes Legal/Tax Employees Products Compliance Physical Execution
	Identify, assess, monitor and mitigate control
	OR capital
	Basic Indication Approach, Standardized Approach, Advanced Measurement Approach, Others (more sophisticated methodologies)
	Historical data
	Qualitative and quantitative analysis Likelihood analysis Impact analysis Loss and severity distribution 5 years Risk calculation
	Relevant accounting requirement e.g. treatment of expenses vs. treatment of losses
	Gap analysis against requirements
	Reporting lines
	Technological support and diagnostic tools
	The role of Central Bank Examiners/Supervisors/Auditors/Risk Managers
	Documentation
	Treatment of Overseas subsidiaries Home banking vs. Host Country issues

METHODS
Lecture-discussions and case studies.

TARGET AUDIENCE
Audit and Risk Management staff with minimum 3 years experience who need to understand the subject for compliance.

LANGUAGE
The Program will be presented in English.

DURATION
30 training hours, five days, morning and afternoon sessions.

2. CENTRAL BANK RULES AND REGULATIONS

Central Bank regulates the banks and financial institutions according to the government policies, formulated from time to time. Its functions, among other things, is to monitor such a credit policy which assists in socio economic progress, keeps abreast with both domestic and international economic developments, especially as monetary and financial policy regulator, by issuing appropriate rules and regulations.

OBJECTIVES
This Program will help participants to:

	familiarize participants with the rules and regulations,
	apply these rules and regulations in their work situations.

CONTENTS

	Central Banks objectives in setting these set of rules and regulation
	What are the rules and regulations for: Credit division Treasury and Investment division Credit Administration department Audit division Information Technology division Banking Operations
	Who is required to implement the rules and regulations
	Impact of the rules and regulations on banks
	Practical problems while implementing these rules and regulations

METHODS
Lecture-discussions.

TARGET AUDIENCE
Auditors and Compliance Officers who need to know the rules and check compliance.

LANGUAGE
The Program will be presented in English.

DURATION
12 training hours, 2 days, morning and afternoon sessions.

3. INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

An increasing number of emerging economies require or will require the use of IFRS in consolidated financial statements. European Union (EU) regulations require all EU listed companies to comply with IFRS, other countries of the world are converging to these standards. The transition to IFRS is a demanding process that requires early planning and thoughts. Kuwaiti banks need to understand the significant importance of the adoption of these new accounting standards, specially when foreign banks are stepping into Kuwait market.

OBJECTIVES
This Program will help participants to:

	understand the significant implications of adoption of IFRS,
	comprehend the transition process from national GAAP to IFRS,
	analyze and interpret IFRS financial statements,
	apply the revised standards on business combinations, financial instruments and consolidated financial statements.

CONTENTS

	Introduction of IASB and IFRS
	Selection of IFRS accounting policies
	The transition process and reporting implications
	Classification of Assets and Liabilities from the bankers perspective
	Accounting policies and IFRS balance sheets
	Application of IFRS in banks and financial institutions
	Impact of IFRS on financial instruments and consolidated financial statements

METHODS
Lecture-discussions and case studies.

TARGET AUDIENCE
Auditors with minimum 3 years experience.

LANGUAGE
The Program will be presented in English.

DURATION
30 training hours, five days, morning and afternoon sessions.

4. OPERATIONS AUDIT

Auditing operations involves examination and appraisal of the entire operations function for the purpose of identifying opportunities for more efficient, effective performance and to assess if operations are performed in a manner which complies with internal controls and established policies.

It optimizes systems and reduces risk of losses, while providing senior management with decision-oriented information. The underlying concepts are: economy, efficiency, control and value for money.

OBJECTIVES
This Program will help participants to:

	understand the management theory related to operational performance,
	understand the main steps of conducting an operations audit and relate them to the current audit planning process.

CONTENTS

	What is operations audit
	Role of internal auditors
	Identification of operations workflow and procedural issues
	The audit process
	Development of audit findings
	Audit of individual functions Legal department Operations Department Trade Finance Cards Back Office
	Credit Department
	Marketing Department
	Treasury Department
	Human Resources Department
	Information Technology Department
	Reporting of audit outcome

METHODS
Lecture-discussions, exercises and detailed case studies.

TARGET AUDIENCE
Bank Auditors.

LANGUAGE
The Program will be presented in English.

DURATION
42 training hours, seven days, morning and afternoon sessions.

5. RISK BASED AUDIT (BEST PRACTICES)

As markets expand and integrate in a global economy the need to minimize potential risk in all areas of banking activity becomes ever more critical. Responsibility for this cannot be left solely to Senior Management and members of the Risk Committees the Audit Department also needs to guide and counsel as appropriate.

OBJECTIVES
This Program will help participants to:

	appreciate where potential risk arises in bank activities,
	understand how to measure the risks that arise,
	advice concerned parties as to the relevant issues of awareness and minimization of risks.

CONTENTS

	The types of risk in each area of activity Credit Cards Operations Treasury Marketing/ Sales Support Information Systems Compliance/ Reputation Environment Legal
	The role of the internal auditor in identifying risks
	Computer modeling techniques and Audit testing techniques
	The role of the internal auditor in managing risk
	Corporate governance

METHODS
Lecture-discussions, case studies and practical exercises.

TARGET AUDIENCE
Auditors with a minimum 3 years experience.

LANGUAGE
The Program will be presented in English.

DURATION
24 training hours, four days, morning and afternoon sessions.