Question

discuss how COVID-19 will affect your audit planning, execution and reporting:

a. Risk Assessment

b. Audit Planning and Audit Strategy

Answer 1

The pandemic crisis that world currently faces is a problem that disrupts entire society. Financial institutions are playing important role to minimize the effect as much as possible. With a complete focus on ensuring a well functioning financial system in time of these crisis. Internal Auditing functions are revisiting the role they needed to play within their institution.The main goal must be to safeguard people while at the same time providing a stable financial system that can be relied on

Risk assessment

Internal Audit Addressing risk related to covid 19

Update Audit plan

Identify emerging risks

Review risk assessment

Recommend remediation plans

Update Audit plan:

Consider following areas for potential changes in audit scope and focus:

Credit Administration Risk grading is always a focus but probably seemed less riaky given the solid state of economy prior to pandemic Risk grading controls are critical now, with a focus on loans in the following sector

Small medical facilities

Service industry

Lodging

Allowance for loan and lease losses:the assessment of qualitative factors is likely critical as financial institutions institutions try to estimate losses. Qualitative factors should be used to account for incurred and expected losses depending on which model is currently being used.

Liquidity Risk management: Evaluating financial institutions contingency funding plan and testing sources for liquidity is prudent given potential for increased cash demand

Accounting and Financial reporting:Month end close and financial reporting process likely have been modified given the trend towards remote working environments. Changes to process and controls typically increases the Risk of errors and Mistatements.

Information Technology:Few financial institutions planned to have the majority of their workforce working remotely The impact of increased IT infrastructure demand s and ability to sustain the demand is a major area of concern

Information security:Fraudsters see disruption as opportunity, and risks may arise from an increase in the number of remote users and working from home. The financial institutions customer and employees also face increasing phising attempts.

Planning must be made accordingly

Interactions with management and process owners

Use this as an opportunity to re-evaluate your process and add value to the financial institution

Keep audits on track with technology

Moving ahead, whatever that involes