Presentation Transcript

1. Bank Audit in Core Banking System Seminar Friday, 29th March 2013, Jaipur
2. banking under core banking system
3. banking under core banking system Major statistics
4. banking under core banking system Major Objectives of the IS Audit Policy Safeguarding information systems assets/ resources and IT Processes. Verification of data integrity and security. Evaluation of systems effectiveness and efficiency. Verification of compliance to internal guidelines and procedures in addition to legal, regulatory and statutory requirements.
5. banking under core banking system Safeguarding IS assets/ Resources and IT Processes Monitoring effective usage of hardware, software, networking and communication facilities, people (knowledge), system documentation, supplies etc. Evaluation of infrastructure (like power, air conditioning, humidity control, physical security, surveilance and monitoring, incident monitoring etc.) in safeguarding of IS assets/ resources.
6. banking under core banking system Verification of data integrity and security Validate that the data entered and captured in the system is duly authorised, verified and completed and that proper control is exercised at all stages viz. data preparation, input, verification, output, modification, deletion, electronic transmission, etc. to ensure authenticity and correctness of data.
7. banking under core banking system Evaluation of system effectiveness and efficiency Evaluate the extent to which the organisation goals, business and user needs have been met with and to determine whether resource utilisation is effective and efficient in achieving the desired objectives.
8. banking under core banking system Verification of compliance to internal guidance and procedures in addition to legal, regulatory and statutory requirements Adherance to maintenance of integrity, confidentiality, reliability, availability and dependability of IS resources. Legal, regulatory and statutory requirements. Internal policy and procedures based on prescribed standards and guidelines.
9. banking under core banking system Verification of compliance to internal guidance and procedures in addition to legal, regulatory and statutory requirements Adherence to maintenance of integrity, confidentiality, reliability, availability and dependability of IS resources. Legal, regulatory and statutory requirements. Internal policy and procedures based on prescribed standards and guidelines.
10. banking under core banking system Process of FRAUD Pressure + Opportunity + Ability to Stabilize = FRAUD
11. banking under core banking system Benford law of fraud detection
12. banking under core banking system Overview of Benford Law The basis of the law is the mathematical formula: p(dd) = log(1+1/dd) where p(dd) is a probability of a number having initial digit dd and where dd is a string of one or more digits. For example, probability of initial digit 4 is log(1+1/4) = 0.097 or 9.7
13. banking under core banking system Proactive Fraud Prevention & Detection Anti Fraud Policies & Procedures Fraud Awareness Training Fraud Vulnerability Reviews Fraud Risk Assessment Whistle Blower / ‘Report a Fraud’ Post Event Analysis Reviews & Investigations Data Mining & Analysis
14. banking under core banking system Online banking FRAUD
15. banking under core banking system Online banking FRAUD
16. banking under core banking system Online banking FRAUD
17. banking under core banking system Online banking FRAUD
18. banking under core banking system Online banking FRAUD
19. banking under core banking system BEHIND THE SCREEN Online banking FRAUD
20. banking under core banking system Online banking FRAUD
21. banking under core banking system Online banking FRAUD
22. banking under core banking system Online banking FRAUD
23. banking under core banking system Online banking FRAUD
24. banking under core banking system Do’s for the Auditor Pre-audit study of the branch by going through the auditee related off-site surveillance reports and pre-requisites documents. Prepare proper audit plan based on 1 above. To maintain utmost secrecy with regard to audit program and its findings. Auditors to display team spirit and avoid misunderstandings/ arguments in the presence of auditees.
25. banking under core banking system Do’s for the Auditor Inspection of the branch has to be commenced before commencement of business hours to verify the physical cash, security arrangements etc. To act in a normal friendly fashion and help to improve normal working of the branch. Discuss his findings with branch officials on daily basis and try to rectify the defects then and there itself.
26. banking under core banking system Do’s for the Auditor Give auditees a chance to express their opinion while discussing the issues. Getting proper explanation in a co-operative atmosphere will save precious time. In case of difference of opinion with auditee, the auditor should first discuss with the leader of his team. Further discussion on a higher level if required, may be made. If the inspecting officer comes across any information which causes him to suspect any element of fraud, gross negligence, gross incompetence or similar unfavorable actions or tendencies, he should report the matter to the leader of the team immediately.
27. banking under core banking system Do’s for the Auditor The members of the team should keep continuous dialogue with the leader of the team on important findings and be guided by his advice. Auditor should maintain a neat appearance and a courteous manner.
28. banking under core banking system Don’ts for the Auditor Auditor need not act overly reserved or unfriendly in order to maintain his independence as an inspecting officer. A forbidding attitude on his part may well cause others to adopt the same attitude towards him. This can adversely affect the work entrusted to the inspecting officer. Auditor should not get involved in heated argument with auditee. Auditor should not give orders to auditee and seek requirements from the officer assigned to assist him on a particular job. The concerned officer would issue the necessary orders to their employees if he accepts inspector’s suggestions and recommendations.
29. banking under core banking system Don’ts for the Auditor Auditor should not delay the submission of audit report. Auditor should not discuss sensitive matters of the auditee with others.
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