effective internal audit for central...

www.centralbanking.com/windsor

Since 1999, Central Banking Publications has organised annual residential training courses/seminars which have been attended by more than 4,500 central bankers and supervisors from over 140 countries.

Series Advisor Charles GoodhartProfessor EmeritusLondon School of EconomicsFinancial Markets Group

April 28 – May 1 2015, Cumberland Lodge, Windsor UK

Effective Internal Audit for Central Banks

Course Chairman Paul AppsFormer Head of AuditReserve Bank of Australia

Dear Delegate,“The role of internal audit is now seen by the regulators as a key indicator of the good governance of risk”

Ian Peters, Chief Executive, Chartered IIA UK and Ireland

In recent years, debate in internal auditing has centred on two key issues: the increasing focus on risk management, and the role of the department within the changing framework of good corporate governance.

Central banks are no exception to this.

Increasingly internal audit departments find themselves facing multiple new tasks particularly in ensuring risks have been properly managed and providing assurance.

At the same time, corporate governance has come under particular scrutiny as internal auditors find themselves also faced with an increasing amount of responsibilities to aid the board.

And as central banking changes, so too must internal audit adapt.

This course, “Effective Internal Audit for Central Banks” is designed to equip central bankers to meet these challenges and to discuss methods for developing a clear understanding of the mission of the internal audit department.

The four-day programme of interactive roundtable seminars and workshops offers practical examples of internal audit, as well as questions of organisation and resourcing the function.

The panel of expert speakers combines practical central banking experience and expertise in the technical aspects as well as views from private sector experts.

All discussions are held in roundtable format to encourage participants to share their experiences and debate the pressing issues in their field.

This format, as more than 4,500 central bankers and regulators can attest, encourages delegates to quiz panellists, raise issues and discuss solutions to the specific challenges they face.

We look forward to welcoming you to Windsor on April 28.

Yours sincerely,

Robert Pringle, ChairmanCentral Banking Publications

The organisation and the location were perfect to allow networking and exchange of views Raffaele Giacobelli, Internal Auditor, Bank of Italy

Key sessions focus on:• The relationship between the

board and internal audit• How internal and external

audit can work together effectively

• Technology-based internal audit process

• The interface between internal audit and risk management

• Developing an audit plan

Key speakers include:• Hoe G. Ten, Director,

Internal Audit, Monetary Authority of Singapore

• Stephen Brown, Head of Internal Audit, Bank of England

• Ingunn Valvatne, Head of Internal Audit, Norges Bank

• Paul Boyle, Council Member, Chartered Institute of Internal Auditors

Tuesday 28 April

Enhancing Good Practice


Introduction: key issues and future challenges Paul Apps, Former Head of Audit, Reserve Bank of Australia This introductory session will look at how the role of the central bank internal audit function has changed as a result of the crisis, and consider what responsibilities the department must now take on as part of its remit. Consideration will be given to relations with other functions, notably risk management, and reporting lines, whether they are to the board, governor and or an audit committee and the ever-growing need this creates for the independency of internal audit from other departments within the organisation. The discussion will broaden to draw out the challenges facing internal auditors, and delegates will be invited to share their main areas of interest and key issues facing their organisation. The themes emerging from this discussion will be reintroduced to debates throughout the week and will set the tone for the days to follow.

Internal audit: developing good practice Paul Boyle, Council Member, Chartered Institute of Internal AuditorsFor internal auditors in the private sector there are principle-focused professional standards that provide a framework for an effective and disciplined service. Central banks, although typically not being obliged to follow such standards, have a responsibility to set a good example as a regulator and to embrace the principle of professional internal auditing. In this session, the speaker will examine the usefulness of international standards within a central banking context. In particular he will consider three interrelated questions: how can such standards be successfully applied to the role of the central bank internal auditor? How will these standards vary between central banks? And where are the conflicts between the professional standards and central bank best practice?

Building effective relationships with departments and functionsJosef Medek, Executive Director, Internal Audit, Czech National Bank (invited) How can internal auditors build good relationships whilst maintaining independence when working with other departments? How can they maintain good relationships whilst auditing the process rather than the entity? How can they uphold their objective approach whilst working closely alongside line managers and their teams? These are questions a good internal auditor asks. However, a perception of bias towards these relationships can easily lead to internal auditors being accused of “not understanding the business”, quickly destroying any symbiosis. This can be addressed in a number of ways and, in this session, the speaker will illustrate how internal auditors can forge better relationships and strive to maintain a balance between independence whilst keeping in regular contact through existing forums or formal relationship programmes.


About the course chair:Paul Apps is an internal audit and risk management advisor to the International Monetary Fund (IMF) and has recently contributed to assistance programs to central banks in Tajikistan, Bangladesh, Costa Rica, Botswana and Lesotho. He is a member of a number of audit committees in Australia including the Independent Commission against Corruption, the Australian Film Television & Radio School and four health districts. He was previously Head of Audit at the Reserve Bank of Australia, a post he held for eight years. He was an IT Audit and Security Partner with PwC and headed up that capability in offices in both Australia and New Zealand. He served as president of the local chapters of both the IIA and ISACA in a number of locations and was elected to the national board of the Institute of Internal Auditors (IIA) Australia.

Wednesday 29 April

Developing the Internal Audit Framework

Windsor, 2015

Corporate governance: the board-audit relationshipLudek Niedermayer, Director, Deloitte Consulting and former Vice Governor, Czech National BankAs central banks take on more and often complex functions, so the question of how to ensure good corporate governance becomes more difficult. In a central bank it is the board which typically oversees the work of internal audit. Yet, internal audit also plays an important part in the board’s role in reviewing effectiveness and efficiency. In this session the speaker will discuss in depth the relationship between internal audit and the board and whether it can become a more integral part of the governance system.

Workshop: developing an annual audit planLed by the ChairmanFrom bank supervision to currency printing, central bank activities perform a wide variety of tasks. This panoply of functions makes it a challenge to find a base comparison methodology to determine which function is more important to audit. The use of common risk factors is a way to square the circle and, in this session, the chairman will lead a discussion focusing on how to use a risk-based approach to develop an annual audit plan.

Efficient internal auditing: how to build a value-for-money internal audit department Patrick Bailey, Head of Internal Audit, Sveriges Riksbank and the Swedish Financial Supervisory Authority (invited)An internal audit function can significantly help the bank address the risks that it faces. Moreover, internal audit can contribute to making business processes more efficient and less costly to the organisation. Yet internal audit teams typically run into two obstacles. First, in common with others, they face having to deliver more with less. Second, they are stigmatised as “the watchdog”. In this session the speaker will consider the key challenges facing central bank internal auditors in today’s difficult economic conditions and explore some of the initiatives that can be utilised to deliver a value-for-money service.

Auditing information systems: a constructive approach Hoe G Ten, Director, Internal Audit, Monetary Authority of SingaporeIn today’s environment, not only is there an increased dependence on information systems for performing critical functions, but, technology is increasingly becoming the first port of call for drives to reduce costs and improve productivity. Here internal audit has a crucial role to play in ensuring a truly cost effective approach in any new IT initiative from the ground up. This session will discuss the key issues relating to planning and delivering an effective audit of IT, including audit’s role in long-term IT projects.

How are the skillsets required by internal audit changing?Panel discussion led by the Chairman with Hoe G Ten and Patrick Bailey (invited)With the landscape of internal auditing continually adapting and with new regulations and requirements increasingly implemented, more than ever, a robust and objective internal audit function is required. The session will address the skills required of an internal auditor going forward. Led by the chairman it will also give delegates the opportunity to discuss experiences and solutions on how and where internal auditors can gain best practice and advance specific skills.

Useful for networking Hubert Bouchereau, Internal Auditor, Central Bank of Seychelles

Thursday 30 April

Adding Value and Building Relationships


The interface between internal audit and risk management Stephen Brown, Head of Internal Audit, Bank of EnglandImportant synergies between risk management and internal audit can be found by, for instance, developing and using common risk library and terminology. At the same time, it is important to identify what roles internal auditors should not take on, such as setting the risk appetite of the institution. In this session, the speaker will outline how internal auditors and risk managers can work together in order to better manage a central bank’s business and reputation risks and how the recent increased focus on risk management within central banks is impacting the internal audit department.

Technology-based aids to internal audit processJulie Champagne, Chief Internal Auditor, Bank of Canada (invited) Internal auditors are increasingly looking into opportunities to use the powerful tool of technology-based audit and data analysis techniques. Computer assistance saves internal auditors considerable amounts of ‘leg-work’ through automation of examination work, freeing staff time to face the growing pressure to deliver more, often with less. In this session, the speaker will show how computer assisted audit tools and techniques help analyse large volumes of data for irregularities, but also what expertise internal auditors need to understand data analysis, sampling and data analytics tools and techniques.

The partnership between internal and external audit: optimisation of rolesChris Sermon, Senior Manager, PwC (invited)The relationship between internal and external auditors can sometimes prove volatile. How can a productive partnership be established and the delegation of roles and tasks be optimised? Working together allows sharing audit plans and helping with the coverage of external audit requirements during internal audit assignments. It can provide an assessment of internal audit itself and deliver recommendations. In this session, the speaker will consider how internal audit can work directly with their external counterparts; including provision of internal audit resources to assist with external audit responsibilities and how internal audit needs to support internal staff during external audits. The speaker will also briefly touch on the topic of cultural auditing to examine whether their current relationship is hindering or supporting the vision of an institution.

Previous attendees include:Bank of Algeria • Reserve Bank of Australia • Austrian National Bank • Central Bank of Bahrain • Central Bank of Barbados • Bermuda Monetary Authority • Central Bank of Bosnia & Herzegovina • Central Bank of Brazil • British Virgin Islands Financial Services Commission • Brunei Currency and Monetary Board • Bank of Canada • Central Bank of Colombia • Czech National Bank • National Bank of Denmark • Central Bank of Ecuador • Banque de France • Central Bank of the Gambia • European Central Bank • Bank of Ghana • Central Bank of Honduras • Hong Kong Monetary Authority • Central Bank of Hungary • Reserve Bank of India • Bank Indonesia • Bank of Italy • Bank of Jamaica • Central Bank of Kenya • Bank of Korea • Bank Negara Malaysia • Maldives Monetary Authority • Reserve Bank of New Zealand • Central Bank of Nigeria • Norges Bank • Central Bank of Oman • State Bank of Pakistan • Bank of Papua New Guinea • Central Bank of Paraguay • Central Bank of the Philippines • Central Bank of Qatar • National Bank of Romania • SAMA • Central Bank of Seychelles • Bank of Sierra Leone • Monetary Authority of Singapore • South African Reserve Bank • Bank of Spain • Central Bank of Sri Lanka • Sveriges Riksbank • Swiss National Bank • Bank of Tanzania • Bank of Thailand • Central Bank of the Republic of Turkey • Bank of Uganda • Bank of England • Federal Reserve Bank of New York • Bank of Zambia

Friday 1 May

Resourcing for Effective Service Delivery

Windsor, 2015

Reporting to the audit committee: adding value as a consultancy function Ingunn Valvatne, Head of Internal Audit, Norges BankInternal audit committees are becoming a standard feature across the central banking industry. Yet, what is the role of the audit committee? Who should be put on it, by whom and for how long? More broadly, how can internal auditors foster and strengthen the relationship with the chair of the committee? Although it is not the committee’s role to plan or conduct audits, it can be a very powerful “friend” of the internal audit department in ensuring that audit recommendations are addressed and clear regimes understood. In this session the speaker will discuss these challenges as well as how to ensure that reports matter, that they are relevant and that they have the right breadth and depth.

Staffing the internal audit department of tomorrowIngunn Valvatne, Head of Internal Audit, Norges BankThe question of who will make up the audit team in a central bank in ten years’ time probably seems like a far away concern. Yet, knowing central bank hiring patterns, the incumbent team today probably provides more than half the answer to that question. How to develop successful long-term planning for staffing or how to ensure a balanced composition of personnel? Should staff be recruited internally or externally? Internal hires will know the business well but require a significant amount of on-the-job audit training which quite often is not delivered. The recruitment of experienced external staff presents other challenges, particularly related to be able to offer attractive salary packaging. In this session, the speaker will draw on her experience of resourcing the function in the central bank to show how a blend of internal and external hires can provide an answer.

Lessons and key issuesLed by the ChairmanIn this final concluding session the chairman will draw together highlights and key lessons from the preceding four days of discussions. Delegates will have the opportunity to share their thoughts on issues raised throughout the week and how they can take lessons they have learned back to their home institutions.

CBP’s Spring Series 2015 features the following seminars:

• Strategic Planning and Change Management for Central Banks Chair: Janet Cosier, former Adviser on Strategic Planning and Risk

Management, Bank of Canada• Financial Stability: Designing and Implementing Macroprudential Policy Chair: E. Philip Davis, Principal Research Fellow, National Institute of

Economic and Social Research, and Associate Professor, Brunel University• Central Bank Governance: the Role of the Board Chair: John Jussup, Former General Counsel and Corporate Secretary, Bank

of Canada• New Developments in Banknote and Currency Management Chair: Antti Heinonen, Chairman of Banknote Ethics Initiative and Former

Director, Banknotes, European Central Bank• Central Bank Statistics: From Data Delivery to Analytical Value Add Chair: Laura Vajanne, Head of Statistics, Bank of Finland• AML/CFT: Implementing a Risk-Based Framework Chair: Richard Chalmers, Former Co-Chair of the FATF’s Evaluation and

Compliance Group• Effective Internal Audit for Central Banks Chair: Paul Apps, Former Head of Audit, Reserve Bank of Australia

Booking details


Course fee: £3,200 4-Day (3 nights) residential courseCourse fee includes: en-suite accommodation, meals, refreshments, course documentation and a complimentary copy of the most recent issue of the Central Banking journal. Substitute delegates can be accepted should the registered delegate be unable to attend; please let us know prior to the event.

How to bookThere is a booking form overleaf. Please use one of the following methods to book your place:

Online: www.centralbanking.com/windsorCall: Clare Hope on +44 (0) 207 316 9152Email: [email protected]: Attention of Central Banking Events to +44 (0)207 504 3730Post: Central Banking Publications

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The Venue

The 2015 Spring Series will take place at the Cumberland Lodge, a former royal residence. Set in the tranquil heart of Windsor Great Park, only 27 miles from London and a short distance from Heathrow airport, Cumberland Lodge is perfectly placed for local, national and international meetings. Dining and accommodation are top class and the atmosphere is that of a friendly country house.

About Central Banking Publications

For 25 years Central Banking Publications has been a trusted provider of independent, authoritative and relevant information, commentary and analysis to the central banking community. Central Banking Publications’ events division is the leading independent organiser of public policy seminars/training courses for the official sector. Since 1999, CBP has hosted roundtable seminars and training courses for over 4,500 senior policymakers from central banks, ministries of finance and financial regulatory agencies around the world. Senior officials from more than 115 countries have attended these meetings over the past decade and a half.


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