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 5,000 central bankers and supervisors from over 140 countries.

Series Advisor Charles GoodhartProfessor EmeritusLondon School of EconomicsFinancial Markets Group

26–29 April 2016, Cumberland Lodge, Windsor UK

Effective Internal Audit for Central Banks

Course Chairman Paul AppsFormer Head of AuditReserve Bank of Australia

Dear Delegate,“[…] the internal and external auditing profession forms an integral part of the international and domestic institutional capacity. These professions contribute to both the moral and legal frameworks that maintain and uphold ethics and standards, while forming an important line of defence in upholding good governance in both the public and private sector.”

François Groepe, Deputy Governor, South African Reserve Bank, August 2015

The range of recent corporate governance failures has highlighted the dangers of poor controls and lax standards. Central banks are no exception.

For the internal audit function this means increased pressure and expectations. The remit of its role today includes deeper and broader activity than ever before. Yet, budgets are tight and the tolerance for errors is minimal.

Internal audit functions need to focus on the risks that matter, minimise cost inefficiencies and provide strategic advice. Only with the right strategy, skills and technology, can internal audit live up to these raised expectations.

This course, ‘Effective Internal Audit for Central Banks’ is designed to equip central bankers to meet these challenges.

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 5,000 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 26.

Yours sincerely,

Martina Horakova, Head of Seminars Central Banking Publications

These seminars are really very important, because they provide the possibility of learning through the share of knowledge and several experiences! Ana de Almeida, Deputy Head, Audit Department, Bank of Portugal

Key sessions focus on:• Combining internal audit and

risk management: where to draw the line

• Reporting to the audit committee: how often and what

• Efficient internal auditing: how to build a value-for-money internal audit department

• From data to intelligence: integrating continuous auditing and data analytics

• Developing the annual audit plan

Key speakers include:• Ted Smith, former Executive

Vice President and General Auditor, Federal Reserve Bank of New York

• Ingunn Valvatne, Head of Internal Audit, Norges Bank

• Julie Champagne, Chief Internal Auditor, Bank of Canada

• Merion Anggerek, Director Division I, Internal Audit, Monetary Authority of Singapore

Tuesday 26 April

Auditing Evolving Mandates


Keeping pace with new responsibilities and challenges Led by the chair, Paul Apps, Former Head of Audit, Reserve Bank of Australia Central banks’ mandates have been evolving faster and more profoundly over the past few years than ever before. In order to stay relevant to key stakeholders, the internal audit function must adapt to these developments. Demands for deeper and broader internal audit activity include increasing expectations to identify cost inefficiencies, polishing best practice in operational areas, and providing strategic advice. This not only puts pressure on the function to adopt more efficient internal audit techniques, but also to reposition itself to assume its expanding role. In this session, the chairman will outline the key challenges for internal auditors and invite participants to raise topics of particular importance to them. Themes emerging from this discussion will be taken up throughout the week and inform debate in the days to follow.

Corporate governance: the board-audit relationship Ted Smith, former Executive Vice President and General Auditor, Federal Reserve Bank of New YorkAs central banks take on new and often complex functions, the board increasingly relies on internal audit to review effectiveness of departments across the institution. At the same time, internal audit is tasked with evaluating board activity which creates a potentially problematic dual-reporting role for the function. A strong working relationship between internal audit and the board is thus essential for the internal audit function to fulfil its responsibilities. The speaker will analyse the key requirements for an effective board-audit relationship including reporting lines both on a functional and administrative basis, formal and informal communication channels, frequency and timing of interactions and the effective communication of sensitive issues.

Good practice in central bank internal audit Nicola Rimmer, Board Member and Former President,Chartered Institute of Internal Auditors (invited)Internal auditors in the private sector adhere to principle-focused professional standards that provide a framework for an effective and disciplined service. Central banks, although typically not 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? Group discussion will consider the different approaches taken by participants’ institutions and the implications of a decision here, both for auditing practices and more broadly for the central bank’s reputation.


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 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 27 April

Key Elements of a Modern Audit Function

Windsor, 2016

Internal audit’s emerging role in driving corporate culture Ted Smith, former Executive Vice President and General Auditor, Federal Reserve Bank of New YorkFollowing a range of corporate governance failures, organisations are taking on board lessons learnt from these incidents and focusing on organisational culture. In this environment, central banks too are subject to scrutiny to demonstrate their commitment to enhancing corporate culture. Internal audit can play a key role in this. However, auditing organisational culture is no easy task. In this session, the speaker will show how his institution took on auditing corporate culture from defining and putting a value to the concept of culture, to developing objective measures and indicators, and managing stakeholders in the audit process.

Workshop: developing the annual audit plan Paul Apps, Former Head of Audit, Reserve Bank of AustraliaFrom bank supervision to currency printing, central banks 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 departmentPatrick Bailey, Head of Internal Audit, Sveriges Riksbank and the Swedish Financial Supervisory Authority (invited)It is acknowledged that an internal audit function can significantly help address the risks a central bank faces. However, internal audit can also contribute to making business processes more efficient and less costly to the organisation. Yet in trying to offer this, internal audit teams typically run into two obstacles. First, as 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.

From data to intelligence: integrating continuous auditing and data analyticsChris Stewart-Smith, Director, Global Solutions Consulting, ACL (invited)In today’s environment of an ever-increasing amount of data that needs to be analysed and a rising number of tasks that internal audit is asked to fulfil, the only way to meet these expectations efficiently is through leveraging advancements in technology. The speaker will show specific examples of how data analytics tools can be used to cut audit costs while increasing its coverage.

Technology-based aids to internal audit process Rob Pemble, Director of European Market Development, WolterskluwerInternal 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.

Thursday 28 April

Effective Stakeholder Engagement


Combining internal audit and risk management: where to draw the line Martin Dressler, Senior Auditor, European Central Bank (invited)Can the internal audit function work without compromising its independence if it takes on risk management related tasks? In an organisational environment with an increasing risk management focus, this has naturally become a key concern. Potential efficiency gains through synergies are commonly stated drivers for further integration of the two functions. Loss of independence and objectivity however call for clear lines of separation. The speaker will discuss the current professional guidelines and best practice according to the Three Lines of Defence Model with a particular focus on safeguards and conditions for a suitable collaboration between the two functions. He will outline the potential benefits and drawbacks of deeper integration and invite participants to share their own experiences with the group.

Developing relationships with other departments: finding the right balance Josef Medek, Executive Director, Internal Audit, Czech National Bank (invited)One of internal audit’s most important, yet often underappreciated tasks, is to build and maintain productive relationships with other departments. In this session, the speaker will show how internal audit can forge better relationships and enhance its ability to cultivate information from all corners of the central bank in order to identify opportunities and key risks. Discussion points include the role of formal relationship programmes, regular contact through existing communication forums, and the importance of the internal auditor’s soft skills in relationship-building. Participants are invited to share their experiences in balancing close relationships with internal audit’s requirement for independence and objectivity.

How to make the most of external audit Speaker to be confirmedThe relationship between internal and external auditors can sometimes prove volatile. How can a productive partnership be established and the delegation of roles and tasks optimised? Working together allows sharing audit plans, helping with the coverage of external audit requirements during internal audit assignments and it can provide an assessment of internal audit. 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.

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

Friday 29 April

From Service Delivery to Analytical Value Add

Windsor, 2016

Reporting to the audit committee: how often and what Merion Anggerek, Director Division I, Internal Audit, Monetary Authority of SingaporeInternal audit committees are becoming a standard feature across the central banking industry. Yet, there is no commonly accepted template for what the role is, who should be appointed to it, by whom and for how long? 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 issues and, more broadly, how internal auditors can foster and strengthen the relationship with the chair of the committee?

Matching skills and competencies to the expanding internal audit mandate Ingunn 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 faraway concern. Yet, knowing central bank hiring patterns, the incumbent team today probably provides more than half the answer to that question. But successful long-term planning for staffing is key to ensuring an improving function. 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. The recruitment of experienced external staff presents other challenges, particularly related to be able to offer attractive compensation. 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 learnt and key takeaways Concluding session led by the chairIn 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 2016 features the following seminars:

19–22 April

• Central Bank Governance: the Role of the Board

• Central Bank Statistics: From Data Delivery to Analytical Value Add

• Communications and External Relations for Central Banks

• Financial Stability: Designing and Implementing Macroprudential Policy

26–29 April

• AML/CFT: Implementing the Risk-Based Framework

• Effective Internal Audit for Central Banks

• New Developments in Banknote and Currency Management

• Strategic Planning and Change Management for Central Banks

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: Steve Hands on +44 (0) 20 7316 9140Email: [email protected]: Attention of Central Banking Events to +44 (0)207 504 3730Post: Central Banking Publications

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The Venue

The 2016 Spring Series will return to 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.

Cumberland Lodge, The Great Park, Windsor, Berkshire SL4 2HP

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 5,000 senior policymakers from central banks, ministries of finance and financial regulatory agencies around the world. Senior officials from more than 140 countries have attended these meetings over the past decade and a half.


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