S3 2021 Virtual Internal Audit Expert Panel: Internal Audit and the Second Line of Defence
Does your bank often consider the questions below?
- Should Internal Audit place reliance on the second line and, if so, for what purpose?
- What prerequisites must be met for Internal Audit to do so?
- If other functions are to be relied upon, must they first be assessed as ‘effective’ themselves and, if so, what does that mean in this context?
- Is it different for branches and subsidiaries?
- What does the Chartered Institute of Internal Auditors (CIIA) guidance offer on this topic?
The AFB is delighted to partner with KPMG to support foreign banks in examining the role of intra-line collaboration and reliance for branches and subsidiaries of foreign banks. Getting it right can improve overall effectiveness and coverage but must be done carefully and with clarity of mind as to what differences inherently are intended to exist between the nature of work performed by the third line compared to the second line.
- Internal Audit’s primary purpose is “to help the board and executive management to protect the assets, reputation and sustainability of the organisation”. It plays a key role in assessing the overall effectiveness of banks’ risk management frameworks. In a world of constant change, increasing complexity and perennial cost challenge, there is an ever-present requirement on all functions within an organisation to demonstrate both effectiveness, and efficiency, in their daily operations. In this regard, Internal Audit is often challenged on its scope and coverage, and whether that coverage amounts to duplication of other work performed by the first and/or second lines of defence.
- In this virtual panel meeting, KPMG will offer thoughts on how Internal Audit might consider the role and contribution of other lines of defence, in discharging its primary purpose. As with all regulatory matters in the UK, there is no ‘one-size fits all’ approach. A range of factors must be considered, such as the size and complexity of the bank, the appetite for risk, the possibility of conflicts of interest and the way resource allocations are made.
What will participants implement Back@Bank after the panel session?
- An understanding of CIIA guidance on the role of Internal Audit and the contribution of second line in delivering that role
- An understanding of some of the practical challenges faced by Internal Audit in placing reliance on other lines of defence
Chris Salisbury, Director, Internal Audit, Financial Services – Chris has around 30 years’ Internal Audit experience gained in the ‘Big 4’ consulting environment, the Financial Services Industry, and the UK Public Sector. He has performed the Head of Internal Audit role for subsidiaries and key business units within one of the UK’s largest banks and has acted as a Head of Internal Audit in other industry sectors. He has extensive experience of designing and delivering annual audit plans, and related audit reports, to boards and audit committees across a range of organisations.
Mads Hannibal – Director, Regulatory Practice – Mads started his career as a regulator with the Financial Services Authority where he worked for over 7 years before joining KPMG in 2011. Mads has extensive experience designing and assessing the effectiveness of both risk management and governance frameworks within foreign banks including in the context of authorisation applications.
The AFB has invested in a new website with an automated events booking system. Please take advantage of this to book your place. Your username will always be your bank e-mail address and if you cannot recall your password, or have not yet set one up, you can use the ‘Reset/create password’ button. Alternatively, If you cannot remember your password, you can reset this here or email Imola.firstname.lastname@example.org You will receive details on how to join the session a few days before the event.
Format: Virtual Expert Panel (Platform: Microsoft Teams)
Date: Tuesday, 19 October 2021
Time: 14:30 – 16:00
There will be ample opportunity for questions throughout the session, however, if you would like to submit a question before or have any specific questions or areas that you would like the virtual session to address, please send them to the AFB at email@example.com as soon as practicable. You will receive details on how to join the virtual session a few days before the event.