TraceRiskFraud Controls

Fraud Controls

Risk Inventory

Risk Inventory is a “fourth” dimension of risk that provides insight into embedded elements of risk that are not specifically covered by a Key Risk Indicator. Subtle risks are inventoried in this way so that they can be studied orthographically. What does that mean? Orthographic representations of risk are from made from the front view (Subjects), the top view (Silos), the end view (COSO), and, from the inside out ( which is ‘Risk Inventory’). Examples of risk inventory are Product Development Risk, Customer Relations Risk, Training & Backup Risk and Denial of Service Risk.


Credit Administration

Use Case for Assessing Risk on Loan Administration

Why assess the risk? Credit administration and the quality of the loan portfolio is among the most important aspects of the bank’s business strategy. To a great extent, it is the quality of a bank’s loan portfolio that determines the profitability of the bank and the ultimate return on investment to the shareholders. Conclusions regarding the bank’s condition and the quality of its management are weighted heavily by the degree of risk in lending practices. The loan portfolio and its administration recognizes that loans comprise a major portion of the bank’s assets and that it is this asset category which ordinarily presents the greatest credit risk and potential loss exposure to the bank. Moreover, pressure for increased profitability, liquidity considerations, and a vastly more complex marketplace have produced an ever-changing risk profile to the bank.

Who should assess the risks? Credit Administrator, Chief Credit Officer, Chief Lending Officer, Directors’ Loan Committee

How to assess the risk: Rate the KRIs to determine if a threat would successfully exploit a vulnerability and to justify expenditures to implement countermeasures to protect the bank’s assets or reputation. Use the “Focus Risk Assessment” tool for in-depth analysis of risks and mitigation techniques.

 

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COSO Integrated Framework – SOX 404 & FDICIA 112

Use Case COSO Integrated Framework – SOX 404 & FDICIA 112

Use Case: The New COSO Integrated Framework is an important development as it facilitates efforts by banks to develop cost-effective systems of internal control to achieve business objectives and sustain and improve performance. The new version is the predominant method for reporting on the effectiveness of internal control over financial reporting by public companies as required by Section 404 of the Sarbanes-Oxley Act.

Who Should Assess the Risk? Chief Administrative Officer, Chief Operating Officer, Chief Financial Officer, Internal Auditor

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Consigned Items

Use Case for Assessing Risk on Consigned Items

Why assess the risk? Banks still occasionally sell traveler’s cheques and U.S. Savings Bonds. Holding items on consignment or for resale requires stringent physical and inventory controls, as well as prudent dollar limits on inventory. It is essential that the bank minimize its risk by providing proper internal controls, operating procedures and safeguards to protect against claims arising from mishandling, negligence, mysterious disappearance or other unforeseen occurrences.

Who should assess the risks? Chief Operating Officer, Operations Managers, Teller Supervisors, Cash Management Officer

How to assess the risk: Rate the KRIs to determine if a threat would successfully exploit a vulnerability and to justify expenditures to implement countermeasures to protect the bank’s assets or reputation. Use the “Focus Risk Assessment” tool for in-depth analysis of risks and mitigation techniques.

 

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