This program will provide you with the knowledge and techniques necessary to effectively complete the audit of a community bank’s trust department.
The scope of these audits will vary greatly; it is affected by the types of accounts administered by the department, the complexity of services provided, the types of trust assets held, the management of trust investments, and the existence of internal controls.
By the end of this program, you should have a working knowledge of:
- The steps in planning an audit of a trust department
- The types of bank trust relationships
- Trust accounting
- Physical security and controls over trust assets
- Internal controls over trust operations
- Compliance with bank policy, federal and state regulations and the provisions of the trust document
- The fiduciary duties of the bank and potential conflicts of interest, including recent developments in that area
There are 8 modules in this program plus a final exam:
Introduction: Provides an overview of the program.
- Module 1: Types of Bank Trust Relationships - In Module 1, we will discuss the various types of bank trust relationships that are seen in most community bank trust departments.
- Module 2: Fiduciary Duties and Regulatory Requirements - In Module 2, we will continue our discussion of the fiduciary duties of the bank. Fiduciary duties are an area of primary risk to the bank. Failure to properly manage the bank’s fiduciary duties may lead to regulatory criticism, as well as potential litigation.
- Module 3: Risk Assessment and Planning the Audit - In Module 3, we will discuss the development of the audit plan. An audit plan must be comprehensive and adaptive to the inherent risk and internal control within the bank’s trust department. It is the auditor’s responsibility to develop a plan that ensures adequate coverage and avoids duplication of efforts with the work that is completed by the regulatory authorities or external auditors.
- Module 4: Trust Operations and Internal Controls - The operational division of trust departments is the key area in the performance of most of the department’s activities. In Module 4, we will discuss the make-up of the typical operations area, how the elements of the department present additional control risk, and effective control measures in mitigating these risks.
- Module 5: Fiduciary Investments - Proper investment management is central to the fiduciary duties of the trustee. In Module 5, we will discuss the appropriate method of determining and assessing portfolio risk, auditing securities transactions of all types, and recognizing potential investment management concerns.
- Module 6: Physical Security and Fraud Detection - In Module 6, we will discuss the effective audit of physical security and control over trust assets, as well as the responsibilities of the internal auditor in detecting fraud.
- Module 7: Administrative Audits and Reporting Audit Results - In the first part of Module 7, we will discuss the steps in performing an effective administrative audit, as well as key risks and potential “red flags” to be attentive to in trust administration. The second part of the module focuses on the auditor's responsibility to report the results of an audit.
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