Internal AuditBanking & Financial Services

As specialists in Bank Internal Audit we are seeing the global redevelopment of internal audit as it transitions tomeet the demands posed by the revised BIS expectations which include auditing efficiency.

There is no question that changes in regulation have resulted in banks and insurance companies requiring a re-fresh and reconnect of Internal Audit to the Board, to serve as a risk mitigating function of importance. Whetherdriven by Basel 2.5 /III or Solvency II, risk management and internal audit are working ever more closely together.This is Risk Reward’s most noted area of expertise.

What do we see as the current top five challenges facing Bank Internal Audit?

1. Auditing Corporate Governance has become a major concern for regulators who are seeking additionalassurance regarding the operation of Boards, Committees and the effectiveness of executive and non-executive directors. Due to the sensitivity and profile of such an assignment the involvement of an externalresource is generally welcomed.

2. Auditing Internal Audit because The Basel Committee on Banking Supervision has for the first timeestablished the principle that the internal audit function within banks should be assessed for its effectiveness.This independent assessment is to include the integrity, capability and professional competence of internalauditors, the scope of their work, their assessment of the Board and the Governance Framework, as well astheir oversight of other functions such a Risk Management, Compliance and Finance.

3. The Auditing of Enterprise Risk Management has also raised in importance due to concerns over dataquality. This is because each risk area is led by a subject matter expert, the requirements are complex andthere is significant use of judgement which rarely leads to consistent enterprise risk management. InternalAudit is forced to enhance its skills and be able to audit what it should see as opposed to what is does see.

4. The Internal Audit of Models and model validation departments which requires a level of mathematicalskills often not available within internal audit . Models exist in various parts of a firm including credit risk,market risk, treasury, strategy and pricing and all of these require auditing.

5. The Phased Implementation of Basel III because this is now being implemented in the US (under DoddFrank) as well as in the rest of the world. With Basel III comes a new determination of the calculation,allocation, management and adequacy of capital and liquidity within banks, all of which must be included inthe scope of the internal auditor’s work, with that work itself now made subject to regulatory assessment. Italso changes the way business will be conducted in the future.

We hope you and your Internal Audit management and teams will find something of interest within our serviceofferings, whether a short-term, small single audit project, a major change programme or even a single trainingcourse. Please be assured that high-quality, service excellence and good value are what we are known for, andhave been for more than 10 years.

Why not challenge us to add value to your internal audit department?

Dennis Cox, FCAChief Executive Officer

CEO’s Message

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Risk Reward Limited x About UsRisk Reward is a leading supplier of tailored advisory and training services to thebanking, financial and corporate sectors in developed and emerging markets. Ourconsulting and training services are delivered directly to banks and financial institutionsby our own consultants, or we will supply the same consultants via intermediaries withwhom we have developed close working relationships.

Our business offers a wide range of services delivered by a pool of over 650 consultants. Each of our consultantsare experts in their fields with years of relevant industry experience, ensuring that our services add value fromday one and eliminate the usual consultant learning curve delays. In every case our consultants are able to makesuggestions based on their own considerable experience of dealing successfully with similar challenges in theirown careers.

Here are some examples of recent bank internal audit solutions to the challenges outlined.

In Cairo our internal audit experts designed a programme to modernisethe internal audit function as part of a risk management culture changeinitiative. The bank asked us to guarantee that they would see changewithin their auditors’ behaviour within 3 months. We worked closely withthe total C-Suite of the bank to ensure any potential reshuffle of personnelhelped in maintaining the bank’s productivity, competitiveness and brand.In collaboration with the Chief Internal Auditor, the Audit Committee, theSenior Audit Managers and newly appointed ‘Champions’, our small in-country team were able to redefine the bank’s audit universe, preparethe audit plan using a risk-based approach (treasury, risk management,credit, HR, IT, etc) and write new audit policies, procedures and themanual.We also run an on-going series of practical workshops includinghow to prepare new audit programmes for the top 10 risk-based areas,how to review the audit findings, develop techniques and solutions toimprove presentation of the audit findings, improve negotiation skills withthe Audit Committee and implement effective audit writing.

A South African bank asked fortraining of their internal auditors toaudit the Risk Department; within 15minutes (or as we figured, a run pastthe water cooler and enable them togo upstairs) we received a call fromthe Risk Department in the same bankasking for training as they were aboutto be audited. Naturally, we suggestedto the Head of Human Resources’Training Manager to ‘throw everyoneinto the pool’ together and delivereda 3-week training programme for all150 of the combined teams. Later wereturned specifically to conduct ourview of the ICAAP and run a practicalworkshop to ensure the bank’s auditteam could continue without the needfor consultants.

A Saudi Arabian Islamic Bank required thebank’s internal audit function to be redesignedand realigned to the changes implemented asit became compliant with traditional riskmanagement. Our qualified Islamic bankingand finance experts, working in collaborationwith the local Shariah board, successfullydesigned the audit programmes for Islamiccredit, risk management and liquidity risk andrecoveries.

In Kenya an Internal Audit team was seen as failing by its Audit Committee. OurConsultants reviewed the audit function against the BIS sound practices paper andtrained the auditors on risk based auditing and writing audit reports. We alsodeveloped training for members of the audit committee to enable them tounderstand their roles and recommended a restructuring of the audit function.

An accountancy firm with offices in a major off-shore marketasked our bank internal audit team to help them with audittraining for their own consultants who in turn were providinginternal audit services to their banking and finance clients.When the costs to train their own team came underdiscussion we suggested that the firm ‘host’ this internalaudit training and make it available to their clients locally ona discounted commercial basis (where such technicaltraining was quite rare). More than 20 client organisationsattended; the accountancy firm covered their costs, theyprovided a highly-valued service to their external clientsthrough training (which they could not offer otherwise dueto potential conflicts of interest) and even offered a fewpasses to the local regulator to attend, too.

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Global Markets & ClientsAfricaABSA Bank LtdABSA CapitalAccess Bank PlcAfrica Finance Corporation NigeriaAfrican Banking CorporationAhli United BankASO Savings and Loans plc (Nigeria)Audi BankBank of AlexandriaBank of Kigali LimitedBank Windhoek LtdBanque Africaine de DéveloppementBanque Bemo Saudi FransiBanque Du CaireBanque Populaire du Rwanda Ltd - RWBarclays Bank (South Africa)Barclays Bank MoçambiqueBDO (Mauritius)BNP ParibasBoE Private Clients (a Div.of Nedbank Ltd)Botswana Public Officer's Pension FundBRDCadiz Asset ManagementCavmont Capital Bank (Zambia)Central Bank of NigeriaChaseBank (Kenya)China Construction BankCITCO (Mauritius) LimitedCitizens SME Agency (Botswana)Colgate PamloliveCommercial Bank (Zambia)Commercial Bank of EthiopiaCommercial International Bank (Egypt)Consolidated Bank of KenyaConstruction & Business Bank S.CCRDB Bank PLCCredit Agricole Corporate &

Investment BankDéveloppement Bank PHB (Nigeria)Dashen Bank S.C.Deloitte & ToucheDevelopment Bank (Rwanda)Development Bank of Mauritius LtdDevelopment Bank of Southern Africa

(DBSA)EcobankEgyptian Banking Institute (Egypt)Equity Bank Rwanda LimitedExam Ready (South Africa)Export Development Bank of EgyptExport Development Bank SudanFinance Bank (Zambia)First Atlantic Merchant Bank (Ghana)First Bank of Nigeria PLCFirst Rand Bank (South Africa)FITC - Financial Institution Training

Centre (Nigeria)FNB CommercialGCnet LimitedGT Bank (Nigeria)HFC Bank (Ghana)Housing Finance (Uganda)HSBC BankIndefund (Malawi)Industrial Development and Workers

Bank of EgyptIndustrial Development Corporation (IDC)Intercontinental Bank Plc (Nigeria)Intermarket Banking (Nigeria)Investec (South Africa)Investec Asset ManagementInvestment Banking & TrustInvestrust Bank (Zambia)KCB Bank Rwanda LimitedKenya Commercial Bank LtdKPMG Professional ServicesLefisa Ventures (Lesotho)National Bank (Malawi)National Bank of Abou DhabiNational Bank of EgyptNational Investment Bank (Ghana)Nedbank (South Africa)Nedbank LtdNERFUNDNigeria Capital Market InstituteOmnifinance (Cote D'Ivoire)Press Trust (Malawi)Prudent Bank (Nigeria)Public Investment Corporation (PIC)Rand Merchant Bank (a Div.of

FirstRand Bank Ltd)Rawbank - DRCRokel Commercial (Sierra Leone)ScotiabankSierra Leone Commerce BankSkye Bank PlcSouth African Express AirwaysSouth African Reserve Bank (SARB)Standard Bank GroupStandard Corp. & Merchant BankSterling Bank PlcSudanese Egyptian BankSuez Canal Bank

Trust Bank (Ghana)UBA (Nigeria)Union Bank (Cameroon)Unity Finance LimitedZanacoZenith Bank (Nigeria)

AmericasAAA Northern CA, NV & UtahAIPSOAllianz Global Assistance USAArvest Bank GroupAuto Club GroupBanco Industrial de VenezualaBank HapoalimBank Leumi USABank of AmericaBank of UtahBank PlusBank UnitedBoard of GovernorsBRD Groupe Societe GeneraleBrown Smith Wallace ConsultingCapital OneCentral Bank of BrazilCentral Bank of MexicoChapman ConsultingChicago Bridge & Iron CoCitizen's BankComerica IncDepository Trust & Clearing CorpDeutsche Bank AGDNB Bank ASAE*Trade Financial GroupEmblemHealthEnbridge IncEvans Bank NAFederal Audit Loan BankFederal Home Loan BankFederal Reserve Bank of DallasFederal Reserve Bank of New YorkFidelity Management ResearchFirst Citizen's BankFirst Niagara BankFirst Republic BankFRB of New YorkFreddie MacGEICO CorpGeneral MotorsGirobank NVGlens Falls National Bank & Trust CoHogan Taylor LLPIberia BankING GroupIntesa SanPaoloIntrepid Potash IncJohnson Financial GroupJSC Liberty BankL Thurston Accounting & Advisory SvcsLakeland BankLance IncLegg Mason & CoMarlin LeasingMISMitsubishi UFJ Trust & BankingMizuho Corporate BankMorgan StanleyMutual of OmahaNew York Community BankNorthern TrustOppenheimer FundsPetroleos MexicanosProvident BankRabobankResource BankRidgewood Savings BankSignature BankState StreetSterling Savings BankSumitomo Mitsui Trust bank LtdSvenska Handelsbanken (New York)TD BankUniversal Property & Casualty InsuranceValley National BankWells Fargo

AsiaABN-AMRO (Hong Kong, Singapore)Affin Bank BhdAlliance Bank Malaysia BhdAsian Finance Bank BhdBanco Nacional Ultramarino (China)Bangkok Bank Public Co.,LtdBank Islam Malaysia BhdBank Negara (Malaysia)Bank Negara Indonesia (Persevo)Bank of BarodaBank of ChinaBank Of TaiwanBank Rakyat BhdBank SinopacBank TuranAlem (Kazakhstan)Barclays Private Banking (Hong Kong)

Canara BankCathay United BankChang Hwa Commercial BankChina Development Industrial BankChinatrust Commerial BankCIMB Bank BhdCIMB Investment Bank BhdCitibank (Taiwan) LimitedDFCC (Sri Lanka)Dhaka Bank Ltd (Bangladesh)Dutch Bangla Bank (Bangladesh)E. Sun Commercial Bank, Ltd.EON Bank BhdFinancial Supervisory ServiceFirst Commercial BankHong Leong Bank BhdHua Nan Commercial Bank LtdICBC (Hong Kong China)ICICI Bank (India)Industrial Bank Of Taiwan.Jih Sun International BankL B Finance Ltd (Sri Lanka)Malayan Banking BhdMega International Commercial BankMercantile Bank Ltd (Bangladesh)Mitsubishi UFJ Securities International PlcMizuho Corporate Bank. Taipei BranchMonetary Authority (Hong Kong)Monetary Authority (Singapore)National Development Bank (Sri Lanka)Norinchukin Bank (Japan)Orient Financial Services (Sri Lanka)Oriental Bank of Commerce (India)Overseas Chinese BankingPremier Bank (Bangladesh)PricewaterhouseCoopersPT Bank BNI (Persero)Public Bank BhdREDmoney (Malaysia)RHB Banking GroupSociete GeneraleStandard Chartered Bank MalaysiaState Bank of Bikaner & Jaipur (India)Sunny BankSwiss Reinsurance (Hong Kong)Taichung Commercial Bank Co., Ltd.Taipei Fubon Commercial BankTBK (Singapore)The Bank Of Nova ScotiaThe Export-Import Bank Of The

Republic Of ChinaThe Shanghai Commercial And

Savings Bank Ltd.Union Bank Of TaiwanUnited Overseas Bank (M) BhdWhitestone (Singapore)Yuanta Commercial Bank

EuropeABN AmroABN-AMRO Bouwfonds (Netherlands)ACCA (UK)AccBank (Ireland)Ahli United Bank (UK) PlcAIB Group (UK) plc -Allied Irish Bank (GB)Alpha Bank Cyprus LtdAlpha Bank London LtdAlsace ConsultingAndra AP fonden (AP2) SwedenANZ Banking Group LtdAssicurazioni GeneraliAssociation of Cyprus Commercial BanksAtradius Credit Insurance N.V.AtradiusAvantage (UK) LimitedBanca d'ItaliaBanca Monte Dei Paschi Di Siena SpABanco de SabadellBanco do Brasil SABanco Espirito SantoBanco Internacional Do Funchal S.A.Banco Santander TottaBancpost RomaniaBangkok Bank Public Company LtdBank Julius Baer & CoBank Leumi (UK) plcBank Mandiri Ltd (Cyprus)Bank Negara MalaysiaBank of America NABank of Bermuda (Luxembourg)Bank Of China (UK) LimitedBank of Cyprus Public Co. LtdBank of Cyprus UKBank of EnglandBank of GreeceBank of IndonesiaBank Of International SettlementsBank of IrelandBank of MauritiusBank of MontrealBank of TanzaniaBank One LimitedBank Saderat plcBank Sepah International plc

Bank Vontobel AGBanque Heritage S.A.Barclays Bank plcBarclays CapitalBarclays SpainBES-DRH/FormaçãoBirmingham MidshiresBNP ParibasBradford & Bingley plcBrewin Dolphin Bell Lawrie LtdBritannia InternationalBritish Arab Commercial Bank PlcBritish Bankers' AssociationBroadcastle Bank LtdBrown Shipley & Co LtdBuckinghamshire Building SocietyC Hoare & CoCAF Bank LtdCanara BankCapital One Bank (Europe) plcCeska Sporitelna, a.s.Chartered Institute for Securities and

Investment (UK)Cheltenham & Gloucester plcChina Construction Bank (London) LimitedChristiania Bank (Norway)CIBC World Markets plcCIEL - Azur Financial Services LtdCim Insurance LtdCim Management Services LtdCim Property Fund ManagementCitibank Europe, pclCitibank NACity Speakers International (UK)Clariden Bank (Switzerland)Clydesdale Bank plcComac Capital LLPCombined Insurance (UK)Commerzbank AG London BranchCommerzbank AGConstance Corporate Management LimitedCo-operative Bank (UK)Cooperative Central Bank LtdCo-operative Financial ServicesCoutts & CoCoventry Building SocietyCRDB Bank PlcCredit Agricole Asset ManagementCredit Agricole Corporate &

Investment BankCredit Suisse (Switzerland)Credit Suisse (UK)Crown Agents Bank LimitedČSOB, a.s.Cyprus Development Bank PC LtdDC Gardner (UK)Danske Bank A/SDeloitte LLPDepfa Bank PlcDeutsche Bank AGDeutsche Postbank AGDexia Bank BelgiumDNB ASA (Norway)Dr Nagler & Company GmbHDuncan Lawrie LtdDVBDZ Bank AGEFG BankEIBEksportfinansENL Land LtdEurobank EFG Cyprus LtdEuromoney (UK)EuroNBank (Greece)Europe Arab Bank plcEuropean CommissionEuropean Investment BankExilantEximbank (Romania)FBN Bank (UK) LtdFCE Bank plcFCMB UK LimitedFidelity WorldwideFinance and Credit BankFinancial Services AuthorityFinans Bank TurkeyFriends LifeFord Credit EuropeFortis Bank (Netherlands)Ernst & Young ShinNihon LLCGaranti BankGE Capital UKGE Financial MarketsGenesis Investment Management LLPGhana International Bank plcGjensidige Forsikring ASAGuaranty Trust Bank UK LtdGulf International Bank (UK) LtdHabib Allied International BankHabib Bank (Switzerland)Habib Bank UKHampshire Trust plcHarrods Bank LtdHBOS plcHellenic Bank Public Company Ltd

Hitec (Laboratories) LtdHrvatska Postanska (Hungary)HSBC Bank plcHSH Nordbank AGHVB Bank (Czech Republic)Hypo Alpe Adria BankICA ABICAEW (UK)ICICI Bank UK PLCIF P&C Insurance LtdIG Group Holdings plcIG Index plcIm Bank (Russia)ING Bank N.V. (Slovakia)ING Direct (UK) LtdING Direct NVING Group (Netherlands)Intercontinental Bank (UK) PLCInternational Bank PlcInternational Development (Eire)International Financial Services LimitedInternational Moscow Bank (UK)Investec Private Bank (UK)InvestecIslamic Bank of BritainIslandsbankiJ.P. Morgan Europe LimitedJC Rathbone AssociatesJP Morgan Chase (UK)JP Morgan Europe LimitedJSC “Trasta Komercbanka” Cyprus LtdJSC KAZAKHINSTRAHJT BankJyske Bank A/SKaupthing Singer & Friedlander LtdKBC Bank NVKBC Global Services/ ASMKFC - Pick 'N' Eat LtdKhazanah Nasional BerhadKPMGKredietbank (Luxembourg)Laiki Bank (Cyprus)Landsbanki (Iceland)LeasePlan Corporation N.V.Lloyds Banking GroupLogicaLombard Risk Compliance LtdManaged Initiatives LimitedMarex Financial LimitedMarfin Laiki Bank Public Co. LtdMazarsMCBMEAG Munich ERGO AssetManagementMISMitsubishi UFJ Trust and Banking CorpMizrahi Tefahot Bank LimitedMizuho Corporate Bank LtdMizuho Investment Management UKMKB Bank (Hungary)Mondrian Investment PartnersMorgan StanleyN M Rothschild & Sons LtdNational Australia Bank LtdNational Bank of Abu DhabiNational Bank of BelgiumNational Bank of Egypt (UK) LtdNational Bank of GreeceNational Bank of Kuwait (International) plcNatixisNatWest StockbrokersNBS (Slovakia)Nederlandse Waterschapsbank

(Netherlands)Nemo Personal FinanceNewedge GroupNewton Investment ManagementNomura Bank International plcNordea (Finland)Nordic Investment Bank (Norway)Northern Rock plcOFI-AMOhrlings Pricewaterhouse CoopersPasha Insurance OJSCPerbadan Tabung Amanah Islam BruneiPictet & CiePiraeus Bank (Cyprus) LtdPiraeus BankPunjab National Bank (International) LtdPricewaterhouseCoopers (Romania)PricewaterhouseCoopers (Sweden)PricewaterhouseCoopers (UK)R Raphael & Sons plcRabobank InternationalRabobank NetherlandsRaiffeissen Zentralbank (Austria)Rathbone Investment Management LtdRBSReliance Bank LtdRogers GroupRoyal Bank of BakuRoyal Bank of CanadaRoyal Bank of Scotland (UK)Russian Commercial Bank (Cyprus) LtdRussian Commercial BankRZB Bank Austria

RZB Bank RomaniaSABSainsbury's Bank plcSamba Financial GroupSampo plcSantander BankSantander Cards UK LtdSchroder & Co LtdSchroder Investment Management LtdSEBSERV Swiss Export Risk InsuranceSG Hambros Bank LimitedShanghai Commercial Bank LtdSiemans plcSilicon Valley BankSJ Berwin LLPSlSp,a.s.Smith & Williamson Investment

Management LtdSNS ReaalSociété GénéraleSociete Generale Bank - Cyprus LtdSOFTECSonali Bank (UK) LtdStandard & Poor'sStandard Bank PlcStandard Chartered BankState Street Bank & Trust Co.Sumitomo Mitsui Banking Corporation

Europe LtdSwan Insurance Company LimitedSwedbank (Sweden)SWIPTatra banka,a.s.TD SecuritiesTD Waterhouse Inv Serv (Europe) LtdTesco BankTetraLaval International SAThe Automobile AssociationThe Bank of New York MellonThe Bank of Nova ScotiaThe Bank of Tokyo Mitsubishi UFJ LtdThe Co-operative Bank plcThe National Microfinance Bank

(Nmb) PlcThe People's Bank Zanzibar LtdThe Royal Bank of Scotland GroupThe Toronto-Dominion BankTotal Solutions (Netherlands, Dubai)Turkish Bank (UK) LtdUK Asset ResolutionUKARUlster Bank LtdUniCredit (Slovakia)UniCredit Bank AGUniCredit GroupUnisys (UK)United National Bank LtdUnited Trust Bank LtdUBA Capital (London)USB Bank PlcVanquis Bank LtdVeranda Management LtdVictoriaVolksbank (Slovakia)Vontobel AG SwitzerlandVTB Capital PlcVÚB, a,s.Wells Fargo Bank NAWesleyan Bank LtdWesleyan Savings Bank LtdWinterflood Securities LtdWorldPayWragge & Co LLPYorkshire Building SocietyZKB

Middle EastAbu Dhabi Audit AuthorityAbu Dhabi Centre for Corporate

GovernanceAbu Dhabi Commercial BankAbu Dhabi Investment AuthorityAbu Dhabi Investment Company PJSCAbu Dhabi Islamic BankAfghan United BankAfghanistan International BankAFRIBANKAhli BankAl Rajhi Bank (Saudi Arabia)Al Salam BankAl-Ahli Bank (Kuwait)AlfahimAl-Mashreq Bank (Dubai)Al-Mujaz (Saudi Arabia)Arab Banking CorporationArab Finance House SALArab Gambian Islamic BankArab National Bank (Saudi Arabia)Aramco Gulf Operations Co. LtdAssociated Discount HouseBahrain Institute of Banking and

FinanceBahrain Islamic Bank

Bank AudiBank DhofarBank E-Millie AfghanBank Muamalat Malaysia BerhadBank Saderat IranBank Saudi FransiBank SoharBanque Bemo SALBanque Bemo Saudi FransiBanque Du LibanBanque Libano FrancaiseBanque Saradar (Lebanon)Banque Saudi Fransi (Saudi Arabia)BLC BankBlom BankByblos Bank (Lebanon)Central Bank of MalaysiaCentral Bank of SudanCommercial Bank of KuwaitCommercial International Bank (Egypt)Credit Bank SALCSC Bank SALDoha BankEcobank PlcEFG-Hermes Fund ManagementEngro Polymer & Chemicals LimitedEnhance (Dubai)ENIFinance Al Ain International GroupFinance Gulf Takaful Insurance CoFinancial Control Guaranty Trust

AssuranceFirst Bank PlcFirst Gulf Bank (Dubai)Fleming Gulf (Dubai)Fransabank (Lebanon)Ghazanfer BankGlobal Investment Bank (Kuwait)Gosi - Social Insurance OrganisationGT Bank PlcGulf Investment CorporationHSBCInstitute of Banking Studies (Kuwait)Institute of Public AdministrationInvestment HouseInvestments Emirates Int'l Investment CoIslamic Development Bank (Jeddah)Israel Discount Bank LtdKabul BankLebanon & Gulf Bank SALMajid Al Futtaim Group LLCMashreq Al IslamiMawarid FinanceMCB Bank LtdNational Bank of Abu DhabiNational Bank of KuwaitNational Bank of Umm Al QaiwainNational Commercial Bank (Kuwait)National Commercial Bank (Saudi Arabia)Nigerian Export - Import Bank (NEXIM)Palestine Investment FundPeoples BankQatar Central BankQatar International BankQatar Islamic BankQatar National BankREDmoneyRiyad Bank (Saudi Arabia)Saman BankSamba Financial GroupSaudi Arabian Oil Company (Saudi Aramco)Saudi AramcoSaudi Economic & Development Co.

SEDCOSharjah Islamic BankSkye Bank PlcState General Reserve FundThe City BankUnion Bank PlcUnion National BankUnited Capital Bank (Saudi Arabia)Wema Bank plc

Russia & CISAlfa Bank (Ukraine)Bank TuranAlem (Kazakhstan)Banking Institute of ArmeniaCentral Bank of ArmeniaEurasian Bank (Kazakhstan)GazprombankHalyk BankHSBC (Armenia)Im Bank (Russia)PASA BankPrometey Bank (Armenia)PWC (Ukraine)Raiffeisen Bank (Russia)TranskreditTroika Dialog (Russia)

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Internal Audit: Overview

n Risk Reward works with our clients in theplanning and execution of projects aimed atenhancing the quality and effectivenessof internal auditing. Such projects areinvariably oriented towards transforming fromcompliance based to risk-based auditapproaches, achieving a corresponding up-skilling and reconfiguration of the auditfunction and implementing best practice risk-based auditing tools and up-to-datetechniques.

n Risk Reward also provides experiencedauditors on a co-sourcing basis to workunder our clients’ management and direction,to bring a specific technical expertise to theinternal audit team, provide additionalresources where these are lacking orundertake complete audits.

n Every training course delivered by RiskReward is individually customised to meetthe particular needs of our clients. Irrespectiveof the country where our services areprovided, our team of researchers ensures

that training materials correspond to local andnational laws and regulatory requirements.

n Training can be delivered either at the client’sown premises or in our training facilities inLondon. A list of our most popular trainingcourses for internal audit appears later in thisbrochure.

n Risk Reward Limited has partnered with theInstitute of Internal Auditors (IIA) to offertraining courses to prepare for the CertifiedFinancial Services Auditor (CFSA) andCertified Internal Auditor® (CIA®) exams.These training programmes combine theleadership of an experienced practitioner withthe print and web-based materials to expandyour internal audit knowledge and skills andprepare you for the either exam.

n As most of our projects are delivered inemerging markets our costs are highlycompetitive and we are committed to givingour clients best value for money at all times.

Risk Reward’s internal audit services are focused primarily on the Banking and FinancialServices industry and we travel worldwide to deliver them. However, we will alsoprovide services for companies in the areas of treasury, governance, financial modellingand risk management audits as well. We accommodate every client’s particular internalaudit needs, whether they are in the form of large-scale consultancy and/or trainingprogrammes or providing one-to-one training for an individual auditor in preparationfor a particular audit assignment.

Risk Reward provides the best trainers and consultants in the business. Our technicaland audit experts are professionally qualified with an average of 25 years of practitionerexperience, in both developed and emerging markets, acquired through occupyingrelevant executive roles in their corporate and professional careers.

“Informative, ideal and valuable”– T.M. Abdullah, Senior Auditor, Kuwait Finance House, Bahrain

For more information please visit www.riskrewardlimited.comemail: info@riskrewardlimited.com or telephone +44 (0) 20 7638 5558.

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Internal Audit ServicesExpertise, Experience, Professionalism and Rapid Response

We have developed significant expertise in internal audit modernisations having worked with a number of banksthat wanted to accelerate their progression to modern, risk-based auditing approaches. These are typically ‘rootand branch’ transformations of internal audit functions and, consequently, require that our consultants interactat all levels of the enterprise; audit committee, executive management and internal audit management and staff.

Internal audit modernisation aims to optimise audit resource effectiveness through:

n Definition of the skills requirements relative to a modern risk-based internal audit function and subsequentstaff assessment and selection

n Reorganisation of the audit function through the creation of multi-skilled audit teams to replace siloedstructures that have one-dimensional specialisations (credit audit, branch audit, IT audit etc.)

n Reconfiguration of the audit universe (i.e. identifying areas to be audited) by grouping business functionswithin auditable units that represent, wherever feasible, end-to-end transaction and product processingcycles

n Implementation of a risk assessment methodology that measures the relative inherent risk of each auditableunit

n The prioritisation of auditable units according to their inherent risks and categorisation into high, mediumand low risk auditable units, as a basis for the development of a flexible risk based audit plan

n Design and implementation of risk-based auditing tools and techniques

n Development of an Audit Charter and Manual that reflect risk-based audit approaches and prevailingstandards promulgated by the Institute of Internal Auditors and the requirements of the Bank for InternationalSettlements

n Development of an in-house communications programme to promote the new image of auditing

n Training and mentoring audit teams through the early stages of applying the new risk-based audit approaches

For more information please visit www.riskrewardlimited.comemail: info@riskrewardlimited.com or telephone +44 (0) 20 7638 5558.

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Co-sourcing

In addition to our fulltime professional staff oftrainers and consultants we have developed, overthe years, an unparalleled network of expertauditors many of whom have particular technicalaudit specialisations encompassing, for example,IT, Governance, Treasury, Credit, RiskManagement and Modelling, Stress testing andScenario modelling and many other major areas.

For most financial institutions it is not economicallyviable to retain an audit function that possesses allthe technical specialisations it requires over timeto satisfy the needs of its audit plan. Similarly,internal audit functions often find themselves incircumstances where they do not have sufficientresources to staff their larger audits due toabsences, general staff shortages or as aconsequence of assigning auditors to other tasks,such as investigations.

Many of our clients find co-sourcing using RiskReward’s audit experts the optimal solution in suchcircumstances. Risk Reward will always be able tofind precisely the right resource for any situation.

Training

Risk Reward has a reputation as one of the leadingproviders of top quality audit training in the world.We have successfully provided financial servicesaudit training to more than 250 institutionsincluding banks, insurance companies, centralbanks, external audit firms and national regulators.

We have a vast library of courses covering almostevery aspect of financial services. Each course iscustomised to the specific needs of our clients. Weare ready to travel anywhere in the world to delivertraining or, alternatively, we can host clients at ourexcellent training facilities in the heart of London.

Non-Executive Directors – InternalAudit Report Review Service

Non-Executive Director (NED) members of theAudit Committee are required to be proficient inbusiness, strategy, risk, corporate governance andfinance all at the same time. They are also requiredto develop an intimate knowledge of their bank orfinancial institution and all of the regulatoryconstrains within which it operates. When theserequirements are taken together with the limitedtimeframe at their disposal, they make the role ofan NED very challenging.

Risk Reward Limited can assist NEDs by reviewingaudit reports before the meeting of the AuditCommittee and providing them with expertfeedback and assessment of critical issues; theirpotential impacts, the questions they raise andwhether or not they need to be investigated anyfurther.

Other Internal Audit Services

We also offer the services detailed below:

n Audit Report Writing – writing high qualityaudit reports in English on the basis of drafts(this service is of particular value to auditfunctions that are required to produce auditreports in English where this is not their firstlanguage)

n Audit Programme Reviews – reviewinginternal audit programmes to ensure that theycomply with best practice and consider allrelevant key risk issues

n Benchmarking – assessing the internal auditfunction, benchmarking it against bestpractice and providing a diagnostic thathighlights areas requiring improvement

n International Branch Compliance –undertaking the internal audit of branches orsubsidiaries in the UK of overseas institutionsto ensure that they comply with the UKregulations and global best practice.

For more information please visit www.riskrewardlimited.comemail: info@riskrewardlimited.com or telephone +44 (0) 20 7638 5558.

Internal Audit Training CoursesRisk Reward undertakes Internal Audit training, both in-house and public courses,focusing on the following areas:

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For information on Public and In House Courses please contact your local training prodiver orvisit www.riskrewardlimited.com or contact Laura Luque Nadal at LLN@riskrewardlimited.comor telephone +44 (0)20 7638 5558.

Certified Internal Auditor® (CIA®) exam Part 1 CIA001Certified Internal Auditor® (CIA®) exam Part 2 CIA002Certified Internal Auditor® (CIA®) exam Part 3 CIA003Certified Financial Services Auditor®– Banking (CFSA®) CFSA001Certified Financial Services Auditor®– Insurance (CFSA®) CFSA002Certified Financial Services Auditor®– Securities (CFSA®) CFSA003Auditing Asset Securitisation IA068Auditing Bank Capital and Funding IA069Auditing Basel II/III and Risk Management for Banks and FIs IA042Auditing the Branch Network IA060Auditing Budgeting, Forecasting and Reporting IA050Auditing Business Continuity Planning IA051Auditing Community Banks IA052Auditing the Compliance Department IA068Auditing Counterparty Risk IA043Auditing Consumer Finance IA045Auditing Corporate Lending IA046Auditing Credit Administration IA053Auditing the Credit Committee and Governance IA061Auditing the Credit Department IA018Auditing Credit Scoring IA027Auditing Derivatives IA049Auditing Excel Spreadsheets IA005Auditing Factoring and Invoice Discounting IA054Auditing Financial Accounting IA055Auditing the Finance Department IA062Auditing Fraud and Money Laundering Deterrence IA056Auditing Governance, Risk and Compliance IA006Auditing the ICAAP IA019Auditing the ILAA IA063Auditing the Implementation of Credit Risk Systems IA020Auditing Internal Controls IA002Auditing to International Audit Department IA064Auditing Insurance Companies IA011Auditing Investment Banks IA013Auditing Islamic Banking & Finance ISL004Auditing for Insurers IA010Auditing the IT Department IA021

Auditing Liquidity Risk Management IA070Auditing Living Wills, Recovery and Resolution Plans IA071Auditing Management Accounting IA057Auditing Market Risk IA015Auditing Mergers, Acquisitions and Due Diligence IA016Auditing Model Risk IA012Auditing Model Risk/Model Validation IA003Auditing Operations and Processing IA058Auditing the ORSA and CORSA for Insurers IA040Auditing Product Control IA059Auditing Project Finance IA044Auditing Operational Risk IA017Audit of Recovery and Resolution Planning IA049Auditing the Risk Department IA022 Auditing Solvency II IA041Auditing Trade Finance IA047Auditing the Treasury Function IA023Auditing Value at Risk Models IA024Bank Internal Audit School IA025Basel III for Internal Auditors IA065Capital Management and Basel For Auditors IA038Compliance Auditing IA026Continuous Auditing using Risk Assessment to Build Audit Programmes IC031Debt Finance for Auditors IA028Dodd- Frank for Internal Auditors IA066Effective Audit Committees IA029Fundamentals of Internal Auditing IA001Internal Audit Quality Assurance IA008Managing the Internal Audit Department IA030Modernising the Internal Audit Function IA048Regulatory Update for Internal Auditors IA067Risk Based Internal Audit for Banks IA032Risk Based Internal Audit for Insurers IA033Value for Money & Performance Auditing IA039Writing Effective Audit Reports IA034

Internal Audit Courses

We deliver training to banks, regulators and insurersacross the world via trusted and reputable affiliatesincluding government training centres, trainingcompanies and directly on an in-house basis.

7

n Professional, friendly and prompt responseto your enquiries

n Conference callswith you to determine yourbusiness goals and preferred training formats

n Customised course outlines and coursematerials to meet with your organisation’s ordepartment’s specific needs

n Account Manager to offer you full supportand advice and to ensure that all yourrequirements are met efficiently

n Questionnaires created with your teams todetermine delegates’ levels and depth ofsubject knowledge pre-training

n Evaluation forms prepared for delegatespost-training

n Post-training diagnostic, analytical andreporting services and conference calls

n Complimentary email Question & Answerservices to the trainer from the delegates for3 months

Let us add value to your business

At Risk Reward we add value to all of our training projects from the first instance byoffering a host of complimentary services such as:

‘I never imagined the great impact of the operational risk on the businessas a whole before attending thiscourse... I got a lot of ideas to

implement in my department/bank– J.G., Head of Internal Audit,

Banco Nacional Ultramarino, Macau

8

Other Consulting Services

Risk Reward provides independent, impartial andhighly professional consultancy services acrossnearly all disciplines in the financial and bankingsectors. We operate in most parts of the world,specialising in emerging markets and operatewithin Europe, the Middle East, Africa, Asia andAmericas.

Our services include introducing risk controls,procedures and processes, credit market andoperational risk, Basel II/III implementation andcompliance, analysis, valuation for mergers andacquisitions and general advice. We have over 650specialist consultants available to assist yourneeds.

Non Audit Training Services

At Risk Reward we offer a vast range of trainingprogrammes covering almost every aspect of riskmanagement, corporate governance, banking,treasury, investment banking and a variety of othersubjects. The key to our clients’ success is that wefind out from the client exactly what their trainingneeds are beforehand and then engage our experttrainers to design and write course materials toorder.

For more information please contact LisetteMermod at LM@riskrewardlimited.com or ring+44 (0)20 7638 5558.

Additional Brochures Available

n Training Courses Cataloguen Bank Systems, Data and ITn Financial Crimen Insurancen Islamic Banking & Financen Risk Management

If you would like to be sent an electronic copy byemail or hardcopy by post of any of the brochures,please contact us with your request.

Recruitment

Risk Reward undertakes recruitment, search andselection for internal auditors and risk specialistsfrom our UK based dedicated business unit.

For more information please contact Benn Pople atBenn.Pople@riskrewardsearch.com or call +44(0)20 7638 5584

Additional Risk Reward Services

For more information please visit www.riskrewardlimited.comemail: info@riskrewardlimited.com or telephone +44 (0) 20 7638 5558.

“A very useful overview of internal audit techniquesfor banking made interesting by a good lecturer ...kept the sessions lively with interesting real life

experiences brought into the lecturing”– D.A., Internal Auditor, Svenska, Handelsbanker

... the industry’s 5th most read journal.

A regular journalcovering insights andglobal risk issues ofinterest to thebanking, insuranceand financial sectorsin developed andemerging markets.

riskupdateGLOBAL

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riskupdate Apr

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The quarterly independent risk review for banks and financial institutions worldwide

GLOBAL

© Risk Reward Ltd UK. All rights reserved. Available by subs

cription only – not for sale or resale

Also in this issue

� WHO MANAGES RISKS

BETTER – BANKS ORINSURERS?

� ARE AUDITORSBREAKING COMPANY

LAW RULES

� REASSESSING ANDUPDATING CREDITANALYSIS AND MODELS

� THE CHANGINGGLOBAL FINANCIALMARKET

� THE IMPACT OFGETTING REGULATION

WRONG

THEBRIBERYACT 2010

riskupdate

Au

gu

st 2

01

1

The quarterly independent risk review for banks and financial institutions worldwide

GLOBAL

© Risk Reward Ltd UK. All rights reserved. Available by subscription only – not for sale or resale

Also in this issuen FIRST INTERVIEW WITHADAM FARKASn LOAN REFERENCE RATES:LENDER OR BORROWER –DO I OR SHOULD I CAREn CREDIT RISK: MAKING THE“RIGHT” DECISIONn SIGNIFICANTLY

ENHANCING RISKMANAGEMENT IN THEINSURANCE INDUSTRYn AUDITING SOLVENCY II –ORSAs FOR CORSAsn WHEN THEY CALL YOU –WHO YOU GONNA CALL?n THE FUTURE OF GLOBALFINANCE

ManagingRisk in aVolatile

Landscape

riskupdate

Jan

uar

y 2012

The quarterly independent risk review for banks and financial institutions worldwide

GLOBAL

© Risk Reward Ltd UK. All rights reserved. Available by subscription only – not for sale or resale

Also in this issuen Building CVA on Top of anExisting Risk Infrastructure

n Contingent CapitalInstruments –What is the futurelikely to hold?n Africa: The “Last Emerging Market”

n Africa: The Fascination, Rewards,Hazards and Management of Risk

n Casino v. Junglen The Future of Islamic RiskManagementn To Aggregate Risk or Not? Should that be the Question?

The MythaboutExchangeTradedDeriviatives

Risk Reward Ltd60 Moorgate1st FloorLondon ECR2 6ELUnited Kingdom

Office hours: London (GMT)09.00 – 18.00 Monday – Friday

tel: +44 (0)20 7638 5558fax: +44 (0)20 7638 5571email: info@riskrewardlimited.comwebsite: www.riskrewardlimited.com

AfricaCariska Pieterstel: +44 (0)20 7638 5558CP@riskrewardlimited.com

USA & AmericasLisette Mermodtel: +1 (917) 310-1334LM@riskrewardlimited.com

AsiaLaura Luque Nadaltel: +44 (0)20 7638 5558LLN@riskrewardlimited.com

UK & EuropeLaura Luque Nadaltel: +44 (0)20 7638 5558LLN@riskrewardlimited.com

Central and Eastern EuropeJudit Kovácstel: +36 (0)2094 28173JKCEE@riskrewardlimited.com

Middle EastLisette Mermodtel: +44 (0)20 7638 5558LM@riskrewardlimited.com

Russian Federation & CISJoanna Kraskatel: +44 (0)20 7638 5558JK@riskrewardlimited.com