Audit-Risks Essay Example | Topics and Well Written Essays - 1000 words

Audit-Risks - Essay Example the core operating system has been replaced by a new one that is expected to provide highly efficient and secured transactions from the following three points of sales of the Bank: (a) Inherent Risk: The federal government withdrew funding from the sustainable living program that was launched by the bank on discounted lending rates. The impact of Bank business is not direct because the funding from government was directly to the borrowers (this is an assumption here!!). However the discounts offered by Bank now will not be adequate to reduce cost to consumers which means the applications of Home Loan will reduce once again. The withdrawal of its funding by the Government was a measure to cut expenses which was unexpected and hence the Risk is taken as Inherent. The risk, however, is proposed to be converted to an Empirical Risk and logged under the known Business Risks whereby the methodology will be addressed by the audit team. (b) Technology outage in one of the locations: This outage caused inconsistency in the bank transactions and unwarranted embarrassment to the Customers. A Technology Risk that directly impact Customers has cascaded effect on reputation loss and hence causing exposure to a business risk. The incident analysis, root cause analysis, corrective actions and preventive actions performed by the Bank pertaining to this incident is proposed to be assessed by the audit team. The Technology Risks will be assessed by the auditors to verify the proactive controls in place and the control effectiveness measurement shall be undertaken (Basel Committee on Banking Supervision, 2003). (c) Money Laundering by one of the employees and more cases of Money laundering suspected in the Bank: This event has brought to surface gaps in management of economic risks, business risks, & audit risks due to weakness in control & detection of risks due to fraudulent activities. The bank has lost money and lost reputation in market (can cause impact to business) due to