Internal Audit of an ICLAAP

The client, a major banking group, engaged Avantage Reply to support the internal audit department in its review of the ICAAP/ILAAP documents. The objective was to evaluate the adequacy of these frameworks to ensure compliance with regulatory guidelines. This involved assessing governance, risk management practices, stress testing methodologies, and the overall alignment of ICAAP and ILAAP with the regulatory expectations.

Challenges

The main challenges were ensuring collaboration and access to information, and reviewing documentation consistency.

Solution

Avantage provided the audit team who compiled an internal audit memo detailing all observations and providing enhancement recommendations. After delivering the final report, meetings were held with key stakeholders to provide a detailed explanation of the identified gaps and their potential impacts.