Question

analyze the key risk areas associated with an audit of Lincoln Federal Savings and Loan. Next, recommend at least two (2) risk areas that should be included in the audit plan. Provide a rationale to support your recommendation.

Answer 1

Lincoln Federal Savings and loan is bank. So here are some key risk areas associated with an audit of banks are discussed below :-

Computerized change of banking

Innovation has changed the manner in which individuals mingle, shop and like to cooperate with their specialist organizations – including banking foundations (e.g., storing checks through a cell phone, exchanging cash to different clients and so forth.). The computerized interruption happening inside the banking part is affecting organizations all things considered and types. What was once bleeding edge innovation, has now turned into an essential bit of remaining aggressive. With new monetary innovation (fintech) organizations and contributions advancing each day, this part of the budgetary administrations world is trying for establishments to remain side by side of as they attempt to offset fast change with administrative consistence and security. Banks are never again simply budgetary foundations, they should likewise be innovation organizations to contend.

Cybersecurity as an essential risk center

With the quick increment in innovation used by banks, cybersecurity has defeated customary administrative consistence to wind up the essential risk territory concerning money related establishments. Digital culprits and the techniques they use to assault associations are always advancing and winding up increasingly modern. Breaks influence the organization's reputational remaining, as well as money related (as observed with ruptures like the Swift assault bringing about a $81 million misfortune in 2016). Budgetary foundations' dependence on outsider merchants just expands the risk territories they confront and with the fast development of programmers' instruments, relief and defensive procedures are the center versus counteractive action. Bank sheets need to realize what guard systems and methods are set up to counteract and moderate information breaks when they happen, just as how digital issues have been joined into fiasco recuperation technique

Audit Plan

Internal audit work starts with the audit plan drafted by the audit group in counsel with the management. This audit plan incorporates the planning and recurrence of the internal audit work to be continued and it depends on control risk assessment. Risk assessment analyzes all the bank's exercises and internal control framework which displays the likely level of risk present in these exercises. The audit plan must be practical and should consider future improvements and anticipated developments.

Audit plan ought to likewise express an opportunity to be doled out for extraordinary examination if any to be embraced and different exercises as and when required. The arrangement should cover the assets required for doing the audit exercises as far as staff and different assets. Such an audit plan set up by the internal audit group must be affirmed by the bank's management.