Banking Fraud Audit Examination Series

Principal Course Developer: Ms. Edel Mary Vegamora

WEBINAR AGENDA:

I. REVIEW OF THE BANK'S ETHICAL CULTURE (DAY 1)

1. The BSP's Standards on Sound Business Practices for Banks; How these are embedded into the Bank's Culture & Practices;

2. Salient Points of Board Committees' Mandate and Oversight Responsibility for Sound Ethical Culture in the Bank, as well as for Reported Incidents of Fraud or Malpractice affecting the Bank;

3. Salient Points of HR Role for ensuring that the Board-approved Ethical Culture for the Bank is communicated and is practised bank-wide;

4. Salient Points of the Bank's Enterprise Risk Framework, the OPS Risk Management Policy, the Enterprise Fraud Management, with Focus on Fraud or Malpractice Risk, for purposes of this Webinar;

5. Salient Points of the Bank's Regulatory Compliance Framework, with Focus on Fraud or Malpractice Reporting, for purposes of this Webinar;

6. The CAE seeking the Audit Committee's Approval for Unplanned Audits, such as Management's request for a Fraud Audit Examination.

7. Key Elements of Internal Audit's Fraud Audit Examination Policy.

II. UNDERSTANDING THE KEY ELEMENTS OF THE AUDIT EXAMINATION OF FRAUD / MALPRACTICE (DAY 1)

1. How the Bank Auditor would commence the Fraud Audit Examination.

2. Proposed Framework for Audit Strategy for a Fraud Examination Engagement.

3. Proposed Framework for Audit Evidence Mapping, as is relevant to the Incident.

4. Proposed Framework for Gaining Understanding of "The Scheme or Modus Operandi"

5. How the Auditor would Articulate the Findings, Observations, and Conclusion from the fraud audit examination.

III. ANALYSIS OF SAMPLE INCIDENTS OF FRAUD OR MALPRACTICE. (SPEAKER'S LECTURE & PARTICIPANTS/GROUP WORK VIA VIRTUAL MEETING ROOM.)

1. DAY 1 - SAMPLE CASE: Deposit Account with Actual Cash Flows are indicative of an undeclared, possible unlicensed business of the client, being carried out through the bank's system/operations. (Speaker: E.M.Vegamora)

2. DAY 2 - SAMPLE CASES: (i)Cash Abstraction from Depositor/Customer Accounts. (ii)Misappropriated Loan Proceeds. (iii)Misappropriated Bills Payment proceeds. (iv)Depositor's Fund Transfer Fraud. (v)Money Remittances Fraud. (Speaker/SME: Ms. Myrna E. Amahan)

3. DAY 3 - SAMPLE CASES: (i)CASA System Batch Transaction Prioritization Override that misstated the Depositor's Available Balance for Inward Clearing debits or other deductions against Depositor Account. (ii)One-Time-Passcode (OTP) Fraud. (iii)Phishing/Vishing-related fraudulent transactions. (iv)IT Assets Inventory Fraud/Irregularities. (v)Cyber Attack on bank accounts and information assets. (Speaker/SME: Mr. Reginald C. Nery)

4. DAY 4 - SAMPLE CASES: (i)Financial Instruments Investment Fraud. (ii) Check Clearing Items Fraud. (iii)Cash Management Center Fraud/Malpractice. (iv)Client's Deposit Pick Up Fraud. (v)Branches Cash Servicing Fraud. (Speaker/SME: Ms. Estrellita V. Ong)

5. DAY 5 - SAMPLE CASES: (i) Tellers/ATM/CIV Cash Abstraction. (ii) Foreign Exchange Fraud. (iii)Corporate Client's Payroll Accounts Fraud. (iv)Malpractice in ROPA/Asset Management. (v)PEP Client with cash flows from 3rd parties that indicate conflict of interest and possible regulatory violation. (Speaker/SME: Ms. E.M.Vegamora)

IV. AIMING TO ADD VALUE THROUGH A FRAUD AUDIT EXAMINATION (AUDITOR'S VALUE ADDED OR "AVA")

1."Follow-The-Money" Methodology, which may be introduced to the operational control unit

2.Matrix for Culpabilities, which could be useful for HR's due diligence process

3.The Fraud Audit Report and related Communications, enhancing IA 'Partnership' with AuditCom & Senior Management

4.Other "AVA"

V. LEARNING ASSESSMENTS.

1. Online Quiz/Polls to be answered by Participants during the 6-Day Webinar.

2. Participants/Group: Case Workshop via virtual breakout room. Each Group will present online the results of their discussions. (See NOTE below) This provides an opportunity for real-time feedback from the Speakers/SMEs as well as from other Participants/Groups.

3. Interactive online discussion (voluntary among participants) during the Speakers' lecture sessions.

TARGET AUDIENCE:

1. Banking Fraud Auditors;

2. All Internal Auditors, for their skills enhancement and wider audit exposure;

3. Internal Audit practitioners who have "Audit Analytics" or IA Outsourcing services;

4. Internal Audit Management and the Chief Audit Executive (CAE);

5. Audit Committee Members and other Independent Directors of the Board, who have Governance Oversight for Fraud Examination Results;

6. Operational Risk Management & Enterprise Fraud Management personnel, who report to the Board/Committee on fraud matters, and who ensure there is Board-approved Fraud Risk Management Policy, as well as who administer an adequate Fraud Risk Register, Fraud Studies for Corrective Measures, Fraud Policy Enhancements to prevent recurrence.

7. Human Resources Management, who oversee the Board-Approved Ethical Culture for the Bank, the HR Due Diligence on Personnel Culpabilities, the Breaches of the Bank's Ethical Culture and the Bank's Code of Conduct;

8. Business Management, Legal Team, Centralized Control Operations, District/Regional Supervisors, who have Supervisory Responsibility for Fraud Incident Reporting and for the Bank's Administrative Action on fraud incidents;

SCHEDULE:

6 Half-day Sessions (2:00 PM - 5:30 PM)

Day 1 - February 18, 2020 (Thursday)

Day 2 - February 19, 2020 (Friday)

Day 3 - February 20, 2020 (Saturday)

Day 4- February 22, 2020 (Monday)

Day 5- February 23, 2020 (Tuesday)

Day 6- February 24, 2020 (Wednesday)