Bank Director's Training | Forensic Report on Fraud

Review the Reports

Practice

Read the following exercise, then practice your understanding of monitoring methods of operational risk.

What were the warning signs to which Insight's board and senior management should have paid more attention in the bank's Trust Department operations?

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Certainly information contained in the examination report was a warning sign. Another possible warning sign was John's discouraging any internal reviews of his area. His arguments against hiring another trust officer despite his workload could have been a warning as well.

The board of directors should be aware of the major aspects of a bank’s operational risks, just as it is of other risks of the bank.
True	That's correct. It is important that the board knows a bank's operational risk exposure to effectively evaluate the framework management has established to control this exposure.
False	That's incorrect. The statement is true because it is important that the board knows a bank's operational risk exposure to effectively evaluate the framework management has established to control this exposure. Like other risk exposures, the board should be aware of the bank's operational risk to assess the adequacy of its control.

Audit reports and examination reports are two information sources that directors can use to help determine the adequacy of a bank’s internal control process and its management of operational risk.
True	That's correct. Audit and examination reports are valuable tools for helping identify weaknesses in a bank internal controls and increased operational risk exposure.
False	That's incorrect. The statement is true because audit and examination reports are valuable tools for helping identify weaknesses in the bank's internal controls and increased operational risk exposure. Findings from internal/external audit reports and examination reports can point out control weakness that require board and management attention, and, as such, are an important information source for reducing possible operational risk exposure.

Information Technology Risk

Payment Systems Risk

Bank Operations Risk

Business Continuity Plans

Fraud Basics

Key Risks Indicators

Risk Assessment Tool

Suspicious Activity Reports (SARs)

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