Rsymbetova Ainur

Al-Farabi Kazakh national university, Almaty, Kazakhstan

The role of internal audit in assessing the effectiveness of the risk management system of the Bank

The global financial crisis once again demonstrated the importance and the need for effective risk management system. Risk management in the Bank is an integral part of the corporate culture of the Bank and plays an important role in making strategic decisions. Risk management is carried out at all levels in accordance with the recommendations of Basel II and the requirements of the national regulator. [1]

Audit risk (AR) is the risk that the auditor will give an inappropriate audit opinion when the financial statements contain materially misleading information.
For risk management assets and liabilities, the Bank has three main Executive Committee:
1) Committee on the management of assets and liabilities (ALCO);
2) The credit Committee;

3) Investment Committee. .[2, C. 288]

The Department responsible for implementing, maintaining and improving the system of risk management in the Bank is the Department of risk management. The Department of risk of managmeent and compliance Service control (legal risk) ensure continuous improvement of the risk management system, independent assessment and monitoring of risks. [3]

In accordance with generally accepted international practice, the Bank in its activities is faced with 5 major groups of risks:

1. market risk

- interest rate risk;

- currency risk;

- price risk;

2. credit risk:

- the credit risk of the instrument;

- counterparty risk;

- concentration risk;

- country risk;

- industry risk and other;

3. liquidity risk:

- richdocument funding;

- liquidity risk portfolio;

4. operational risk

5. legal risk

To manage and control risks for the Bank are:

1) timely identification of risks and threats;

2) improving the quality evaluation of the maximum values of risk indicators;
3) the development of alternative risk controls;

4) ensure timely action on mitigation and risk management;
5) involvement of the individual structural units of the Fund, including the division of risk management, the process of risk assessment and monitoring, as well as increasing the responsibility of the employees of the Fund in the field of risk management. [4]

The risk management system provides the following internal documents:
1) policy integrated Registrar on risk management;

2) the procedure of investing their own assets integrated Registrar;

3) implementation procedures of internal control and internal audit;
4) procedures aimed at combating the legalization (laundering) of incomes obtained in a criminal way and financing of terrorism;

5) procedures for the management of existing and potential conflicts of interest in a single registrar, and so on Risk can be managed, i.e. to use the measures to a certain extent to predict the occurrence of the risk event and to take measures to reduce the risk. [5]

The effectiveness of risk management depends on the classification. Under the classification of risk should understand the distribution of risk on specific groups with specific characteristics to achieve these goals.(1 table)

1 table.

A detailed classification of banking risks

№

criterion

risks

Internal

1

The scope of risks.

1) the credit

2) the interest

3) the currency

4) the market

5) the financial services

6) the other

External (international, country, national, regional)

1) the insurance

2) the disaster

3) the legal (legislative)

4) the competitive

5) the political

6) is social

7) the economic

8) the financial

9) the risks of transfer

10) the organizational

11) the industry

12) the other

The creditworthiness of the customer

2

The composition of the Bank's clients

1) the small

2) the average

3) the major

General

3

The scale of risks

1) the client

2) the Bank

Private (individual transactions)

4

Degree (level of risk)

1) the full

2) the moderate

3) the low

5

The distribution of risks over time

1) the past (retrospective)

2) the current

3) the future (prospective)

6

The nature of accounting transactions

1) the carrying

2)the off-balance sheet

7

The possibility of regulation

1) the open

2) the closed

These risks arise from the activities of the banks themselves and depend on ongoing operations. Accordingly, risks are divided into:
the related assets (credit, currency, market, settlement, leasing, factoring, cash, risk on correspondent accounts, Finance and investment, and others)
the related liabilities (risks on Deposit and other Deposit operations, interbank loans)is related to the quality management of the Bank's assets and liabilities (interest-rate risk, the risk of unbalanced liquidity, insolvency, risk, capital structure, leverage, capital Bank) the risk of implementation of financial services (operational, technological risks, risks of innovation, strategic risks, accounting, administrative, risks of fraud, security).[6]

The purpose of internal audit in assessing the effectiveness of the risk management system is in to maximize the value of the particular institution, which is determined by the profitability and risk. Risk management is often associated with financial management. Although the function of financial management is not solely responsible for the management of all risks, it plays a Central role in defining, setting volume, tracking and planning for effective risk management.

References

1. Указ Президента Республики Казахстан "О банках и банковской деятельности в Республике Казахстан"

2. А. Н. Асаул, М. П. Valarenga, Н. А. Пономарев, р. А. Фалтинский "Оценка рисков внутреннего аудита процесса" СПб: АНО "ИПМ", 2008. 288 с.
3. Требования к наличию систем управления рисками и внутреннего контроля в банках второго уровня Республики Казахстан от 30 сентября 2005 года № 359 С. 5-6

4. Соболев А. Б. "банковские риски" М.: Инфра-М, 2003. 387
5. Б. Севрук «банковские риски» , М., « Дело ЛТД», 2007 г.
6. О. Ю. Малова "Совершенствование системы классификации преодоления в банковской деятельности" № 96/ 2009