Internal audit of Dealing Activities

Avantage Reply deployed a joint UK / Luxembourg team to assist the internal audit department of a Luxembourg based private bank in performing an audit of their dealing activities. 

The audit covered processes and internal controls surrounding treasury activities as well as dealing on behalf of clients.  The approach taken involved gaining a sound understanding of the bank’s strategy for undertaking such activities, and the risks they faced.  The audit procedures then addressed these risks through a detailed, risk-based programme of testing.

Our findings ranged from detailed process improvement points to some high-level considerations around the organizational structure, resourcing and risk management of the treasury team.

Challenges

The internal audit team wanted our external support because of capacity issues as well as a desire to bring some independent expertise and knowledge of peer practice.

Solution

Avantage Reply’s approach to co-sourcing internal audit functions is always to first gain a complete understanding of the commercial setting, the relevant aspects of the bank’s strategy, the business processes and roles and responsibilities and the inherent and controls risks.  From there we developed a detailed testing plan which we executed. 

We adopted a collaborative approach involving real-time communication of findings with business stakeholders, and clear communication of our written report through a close-out meeting at the end of the assignment.

Our findings then formed the basis of the design of a series of recommendations for the treasury function to improve their organizational design, internal controls, processes and to bolster their resources over time.