Credit risk has always been considered a key risk for financial services organizations and, for a good number of organizations, maybe the most critical risk. This guidance* provides internal auditors with a baseline skill set that allows them to test and evaluate the effectiveness of their organization’s credit risk management framework and processes.
This guidance will enable internal auditors to:
- Understand the importance of credit risk in a financial services context.
- Understand the regulatory environment and requirements related to credit risk.
- Understand the risk governance and risk management processes surrounding credit risk.
- Describe the nature and basis of measurement of the probability of default.
- Design an audit engagement that assesses the appropriateness and effectiveness of the credit risk management framework and the adequacy of the institution’s credit profile.
- Be able to apply IPPF and risk-based internal audit techniques to assess and audit credit risk in their organization.
*Under Review: This practice guide contains some outdated material and references. It remains available while a review is underway.