Internal Audit Assistance and Assessment
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Internal Audit Assistance and Assessment

Representative Engagements

The Internal Audit Department (IAD) is a company’s third – and ultimate – line of defense in the internal control framework. In this critical role, the IAD must be dynamic in identifying and responding to new risks while making sure that existing risks are mitigated. In that sense, the most effective IADs are always building, never built. Staffing an IAD with the resources to monitor existing and emerging risks, regulatory developments, and supervisory expectations is a complicated endeavor.

 


Promontory offers a broad perspective on maintaining a disciplined and thorough internal audit function. Its professionals draw on varied experience as chairs of audit committees, directors of internal audit departments, senior regulatory officials, and Big Four audit partners. Through our professionals, we offer a full range of IAD services, all guided by the principle of transferring knowledge so that our expertise becomes embedded in the client’s internal audit function. We help IADs build processes that enable them to sustain the dynamic roles that they are now expected to perform.   

Our IAD practice is organized by the provision of four services:  

  • Functional Expertise 
  • Assessment   
  • Special Reviews  
  • Audit Committee Relationship & Reporting     

To assist IADs in carrying out their evolving responsibilities, Promontory offers expert advice in most business and operational functions. Over the years, we have assembled some of the most knowledgeable experts in the financial services industry to assist IADs in conducting reviews and interpreting regulatory requirements. We engage in a thorough, collaborative process with the goal of developing functional excellence within the IAD. Areas of expertise include:  

  •  Risk Management/Compliance  
  •  Corporate Governance, Including Board and Business Line Reporting  
  •  Capital Markets  
  •  Basel Compliance  
  •  Model Validation  
  •  Financial Regulatory Reporting  
  •  BSA/AML Compliance, Including Transaction-Monitoring Model Validation  
  •  Capital Plans  
  •  Vendor Management  
  •  Credit Portfolio and Loan Reviews  
  •  Funding  
  •  Planning and Enterprise Risk Assessment  
  •  New Regulatory Requirements    

Assessment   

Regulators have higher expectations of the internal audit function than ever before. “Strong” is the new “Satisfactory.”     

Promontory has extensive experience in performing comprehensive IAD assessments. We have assisted clients in responding to formal orders and informal inquiries from regulators, including planning and implementing related remediation. We also perform gap analysis for senior management and boards of directors. Promontory’s IAD assessment guidelines incorporate the most recent regulatory developments and industry best practices.  

Special Reviews  

Financial institutions have found compelling business reasons to move the reporting relationships of various functions (including loan review, compliance testing, and modeling) under the IAD. Many of these same functions had been subject to review by internal audit instead of reporting through internal audit.  As a result, regulators are increasingly focusing on IAD independence. Our Special Reviews are designed to address regulatory concerns and preserve the functionality of the organizational structure. 

Audit Committee Relationship & Reporting 

Promontory professionals have worked extensively with audit committees. We provide audit committee members the certainty that their company’s internal audit function – as well as their external auditors – follow industry best practices. We help audit committees assess the relevance and quality of management reports and offer the same assurance for each committee’s own reports. 

Representative Engagements

  • A large US bank, performing its annual credit audit, turned to Promontory to assess the effectiveness of its existing policies, procedures, and practices. In the course of its review, Promontory undertook detailed transaction testing and repeated risk rating assessments to support its findings. The review also examined the overall structure, functional responsibilities, execution strategy, audit process, and evaluation of personnel within the function. 
  • The legal counsel to a large European bank turned to Promontory to assist in a review of certain accounting transactions for its client. Our role was to review and comment on the methodology that the bank used to record certain transactions at its headquarters. The bank used our findings to review similar transactions throughout its entire operation. 
  • A prominent regional bank asked Promontory to evaluate its IAD to identify impediments to its receiving a “Strong” rating from the OCC.  We performed an assessment of the internal audit program, taking into account its objective strengths and the regard in which the IAD was held by the bank’s senior management and audit committee.  Our findings and recommendations provided the audit director with a clear and actionable path to a “Strong” rating.