Internal Audit Co-Sourcing - Corep
The customer is a strong financial player present worldwide providing services in banking sector and insurance. The goal of the project was to conduct a co-sourcing Internal Audit on Common Reporting (Corep). Avantage Reply provided the client with a tailored assistance to its specific needs bringing its expertice and knowldge in order to perform high quality assessment of Corep governance processes.
Challenges
The Audit was covering the process for the Corep to the supervisory body which is highly regulated with Capital Requirements Regulation (CRR) and European Banking Authority (EBA) guidelines.
The technical challenge was due to difficulties associated with working in remote. Because of circumstances linked to COVID-19, all the communication required for the project delivery was done via conference calls.
Solution
The on-site inspections conducted by Avantage Reply focused on Common Reporting (Corep). The inspection specifically focused on the banks’ processes for the generation of:
- Risk Weighted Assets (RWAs) and own funds for Common Reporting (COREP);
- Large Exposure Returns (LEX);
- and (iv) Liquidity Coverage Ratio (LCR).
The following areas were examined as part of the thematic inspection:
- the structure of the Regulatory Reporting Function, including the controls, procedures and governance arrangements around the production of the Regulatory Returns;
- the appropriateness of the data quality verification, collection, reconciliation and validation processes utilised prior to submission of the Regulatory Returns
- the correctness of submission of final reports