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Internal Audit Manual

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Internal Audit Manual Empty Internal Audit Manual

Post by claud39 on Tue Nov 12, 2019 7:56 am

Internal Audit Manual




November 12, 2019



Internal Audit Manual News-157355325596714


To / All licensed banks ( Manual of internal audit work as per the requirements of the Central Bank of Iraq ) ... To view click here


https://cbi.iq/static/uploads/up/file-157355307812187.pdf

https://cbi.iq/news/view/1339
claud39
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Internal Audit Manual Empty Internal as per the requirements of the Central Bank Iraqi

Post by claud39 on Tue Nov 12, 2019 8:09 am

I did the translation except for the first page, it is in pdf, and I am not able to translate it, sorry !!

Claud (Moose)


Audit Manual

Internal as per the requirements of the Central Bank
Iraqi

Central Bank of Iraq / Banking Control Department

1

Introduction

These control instructions issued by the Central Bank of Iraq to assess the effectiveness of audit activity
Internal banking, part of the Bank's ongoing efforts to address issues
And strengthen oversight through regulations and guidelines that encourage practices
Sound. 

It takes into account developments in international control practices
Banking institutions, including lessons learned from the global financial crisis that required
The need to develop risk-based internal control systems based on the provisions of Article 54 of
Instructions No. 4 of 2010 on facilitating the implementation of the Banking Law and ensuring safety
Banking activities, each bank should establish its own internal audit function (audit activity)
It is commensurate with the size of the bank, its complexity and the nature of its operations
The department has a sufficient number of qualified and experienced professionals, who possess an audit culture

And technical skills, in order to implement their obligations to the fullest. It must be an activity
The internal audit framework is part of the Bank's standardized control framework
Board Audit Committee.


Central Bank of Iraq / Banking Control Department
2

1. This system is derived from the Basel Committee on Banking Supervisory Principles on Internal Audit (2012) and Governance
Institutional (2015) and International Best Practices.

I. Establishment of the Internal Audit Section
Banks should establish an internal audit department with appropriate powers and place in the structure
Organizational, autonomous, adequate financial and human resources, with access to the Council
Management and its Audit Committee. The existence of independent, competent and qualified internal auditors,
Integrity is vital to sound corporate governance.

 The internal control system
A strong and effective independent audit department is part of the
Good corporate governance. The inspection bodies of the Central Bank of Iraq are evaluating
The Bank's internal audit function is effective and follows its policies
Appropriate corrective actions in a timely manner,
To address weaknesses in internal control as identified by internal auditors. The longer section
Internal audit to ensure the safety of the Bank's work and report to the Board of Directors
To discuss with the Executive Management of the Bank and the Central Bank of Iraq to determine the quality
Has an internal control system. This activity also helps to reduce the risk of loss and damage
Reputation of the bank.

2. Each bank shall have a permanent and appropriate internal audit activity in accordance with requirement No. (12), if any
The bank is part of a banking group or holding company with subsidiaries.

3.Internal auditors must adhere to national and international professional standards and contribute to
It also encourages the CBI to give adequate attention to issues
Prudential in the development of internal audit standards and practices.

4. The administrative entities within the organizational structure of the Bank shall be audited by the Department
Internal audit (including outsourced activities).

5. The Audit Committee of large and internationally active banks is responsible for guidance
And overseeing the Bank's internal auditors. Such a committee shall be established within the Council
Management. Further details are provided in Annex (1) of the Regulations
Responsibilities of Banks Audit Committees. This system applies to banks, government,
Private banks, banking groups, affiliates, and branches
Foreign banks inside Iraq. It also applies to banking holding companies


Central Bank of Iraq / Banking Control Department
3
This system is commensurate with the importance of prudential control
The bank's complexity and international presence.

Article II: - The duties and duties of the Internal Audit Section

1.The Internal Audit Section develops an action plan and procedures, which are updated and focused on
The risk, on an annual basis, is approved by the Board of Directors or the Audit Committee
To do a section
Affiliate at the beginning of the year. The updated plan contains a prerequisite
Internal audits by visiting the Bank's branches on a minimum basis. The action plan must be implemented
The procedures, updated during the year, are monitored by the Audit Committee
Board of Directors.

2. Professional competence, includes the knowledge and experience of each internal auditor which is necessary
The effectiveness of the internal audit activity in the bank. Senior management should develop and strengthen these
Efficiency through skills acquisition for internal audit staff, including through a contract
Training courses inside and outside Iraq. The Central Bank of Iraq will follow up
Such courses are important. The responsibilities of the Internal Audit Division include the audit of transactions
Expenditure before and after disbursement and in accordance with international standards.

Each bank must have an internal audit charter clarifying the purpose of an activity
Internal Audit, its position and validity within the Bank in a manner that promotes effective activity
Note that this Charter is for internal auditing as described in requirement 1
Part of the requirements of corporate governance.
4.The scope of internal audit activities should ensure adequate coverage
Included in the audit plan.

Administrative engagement of the audit department
Given that effective internal audit activity provides independent assurances to the Board of Directors
And senior management regarding the quality and effectiveness of risk management in the Bank and governance (including
Compliance, internal control systems and processes, assisting the Board and management
To protect their organization and reputation. Internal Audit Manager is linked a
Technically, the Audit Committee of the Board of Directors.

2.The Board of Directors of the Bank is ultimately responsible for ensuring that senior management is established
Establish and maintain an appropriate, effective and efficient internal control system.


Central Bank of Iraq / Banking Control Department

4
3. The Board shall support the internal audit activity to carry out its functions effectively.

Internal audit reports are submitted directly to the Board or its Audit Committee.

ُ4

5. Internal auditors will be able to communicate directly with the Board or the Audit Committee
Affiliate
Ge,

6. The internal audit activity of the Bank shall be independent of the audited activities
This requires that the internal audit activity has sufficient standing and authority in the Bank,
This enables internal auditors to perform their tasks accurately and objectively.

7.The Audit Committee, or its counterpart, shall:

Supervising the internal audit activity of the Bank (as set out in Appendix 1.)
The Board, or its Audit Committee, serves as the first line of engagement for a division manager
internal audit.

(B) The Board shall be responsible for approving the appointment of the Director of Internal Audit;
Supervise his work and, if necessary, dismiss him for objective reasons, subject to approval
Central Bank of Iraq.

C- The Bank shall discuss the reasons for requesting the dismissal of the Director of Internal Audit in
Central Bank of Iraq Banking Control Department.

8. The Director of the Internal Audit Section shall be responsible for ensuring that the Department complies with sound standards
Internal Audit and Code of Conduct.

9. The Internal Audit Section shall be subject to the issue of the Board or its Audit Committee
All matters relating to the performance of the tasks assigned to them as described in the Audit Charter
Procedure.

10. The Internal Audit Department shall:

(A) prepare a risk-based assessment report independently of the effectiveness and efficiency of internal control;
Risk management, governance systems and processes established by business and activity units
Support.

B. Providing safeguards regarding these systems and processes.

11. To facilitate the adoption of a consistent approach to internal auditing in all banks of the Corporation
For each bank, the board of directors of each bank must
Banking Group or Holding Company Structure
The bank shall have its own internal audit activity, subject to such activity
Accountability by the Bank's Board of Directors, and is linked to the Director of Internal Audit
In the banking group or holding company.



Central Bank of Iraq / Banking Control Department

5

The banking group or the internal audit activity of the holding company
Conducting internal audit activities on a sufficient scale to ensure that the Board
Fiduciary and legal responsibilities.

12. In the case of outsourcing some internal audit activities, it remains
The Board of Directors, or its Audit Committee, is ultimately responsible for:

A) Quality control of internal audit activities and quality control of any internal audit activities
Performed by external parties and the Director of Internal Audit at the Bank shall assist
The Audit Committee evaluates the quality of any outsourced audit activities.

B) Accountability of the Bank, the audit company or any other service provider
In front of the Central Bank of Iraq.

13. The Bank's internal auditors should communicate regularly with the Bank's auditors
Central for:

Discuss the risks identified by the parties.

Determine the risk mitigation measures taken by the Bank.

Identify weaknesses identified and monitor the Bank's response to address them
Points.

Article III: Internal auditors must be fair and transparent in
Practice their work to ensure the safety of the Bank's work:

Bias and conflict of interest.

1. The internal audit department works by stripping away

2.The role policy should be followed between members of this department and not interfere in
Operational processes for the remaining sections.

3.The Internal Audit Department may express its opinion on certain matters and processes based on
Request from the Audit Committee, Board of Directors or senior management without this
Opinion has no impact on programs and plans of action.

Central Bank of Iraq / Banking Control Department

6

Appendices
Central Bank of Iraq / Banking Control Department

7
In accordance with Annex 1, the role of the Audit Committee, specifically towards the internal audit activity of
The provisions of the Banking Law No. (94) of 2004 and the Instructions of Corporate Governance issued by
This bank.

There should be an audit committee for both public and private banks

The bank, its types of risks, and their complexity, should be:

 Separate from other committees

 It has an independent chairman, who is not the chairman of the council and does not chair any other committee

 Consists of independent or non-executive board members with the possibility of strengthening the committee
Consultants or experts in the field of financial and accounting.

 Includes members with experience in audit practices, financial reporting, and accounting
The Audit Committee is specifically responsible for:

Develop policy frameworks for internal audit and oversee the preparation of financial reports.

B) Overseeing the Bank's internal and external auditors and the private activity
Compliance with the Bank and interaction with them, taking into account that all audits are carried out
External in a professional manner consistent with International Accounting Standards and International Auditing.

C) observe laws and regulations, other problems identified by the auditors, and compliance activity;
And other oversight activities.
Supervising the development of accounting policies and practices by the Bank
Review third party views on the design and effectiveness of the overall risk governance framework
And internal control system.

The Audit Committee as a whole must have a balanced set of skills and experience including
Commensurate with the degree of complexity of the work of the banking institution and its duties. and surely
Has adequate experience in financial reporting, accounting and auditing. And wherever
There is a need, and the Audit Committee has access to expert advice
External as needed.

Central Bank of Iraq / Banking Control Department

8

Contents
Introduction ................................................. .................................................. .1
I. Establishment of an Internal Audit Section ................................................ Article 2:
Article II: Functions and Duties of the Audit Section .......................................... .................. 3
ARTICLE III - INTEGRITY AND TRANSPARENCY ............................................. ............................ 5
Appendices: - ............................................... ................................................ 6
Appendix (1) .............................................. ............................................. 7)



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