Failures in internal control can make the headlines. The failure to implement adequate internal controls led Sociéte Générale to suffer substantial losses (€4.9billion) from fraudulent transactions created by its trader Jerôme Kervial. Six global banks (Barclays, Royal Bank of Scotland, JP Morgan Chase, Citigroup, Bank of America and UBS) lacked internal controls and procedures that would have enabled their management to discover the rigging by its traders of foreign exchange benchmarks. The banks were fined USD 5.6billion and suffered significant reputation risk.
A system of effective internal controls is a critical component of prudent risk management and a foundation for the safe and sound operation of financial markets and institutions. Strong internal controls can help to ensure that the goals and objectives of a financial institution will be met, that it will achieve long-term profitability targets, maintain reliable financial and managerial reporting, increase compliance with laws and regulations, policies, plans, internal rules and procedures, and decrease the risk of unexpected losses or damage to the institution’s reputation.
The objectives of the workshop are to highlight best practice principles and recommended practices for effective controls and provide detailed and practical guidance for the implementation of these principles and practices across the most important risk types.