Axum Bank Ltd. (ABL) is operating in major cities of India since the year 2009 with customer satisfaction score of 9 out of 10. Reason for such a good score is that bank is leader in implementing latest technologies for

CS Professional · Internal and Forensic Audit · PYQS · June 2024
Axum Bank Ltd. (ABL) is operating in major cities of India since the year 2009 with customer satisfaction score of 9 out of 10. Reason for such a good score is that bank is leader in implementing latest technologies for customer services and advancement of its operations. Information technology department of ABL has implemented the following two technology tools. NPL EWS, an early Non-performing Loans (NPL) warning system. It is an enterprise software application that allows banks to predict NPLs with high accuracy. For this, the software combines AI, machine learning, and behavior analytics on banking and dynamic external data. Finance-key for simplifying treasury operations. Finance-key automates and centralizes treasury operations management. The software provides a dynamic dashboard for liquidity, payments, and compliance management. It delivers self-service reporting and real-time visibility into banking data, automating payment and treasury work flows. One of the Big Four Accounting firms is rendering internal audit services to the bank and also uses advanced audit tools to achieve the desired audit objective. In its last meeting with audit team leader, audit team discussed the new technical advancements implemented by the client ABL and invited suggestions on what impact these technologies will have on internal audit function. You are also a part of internal audit team and have been asked to discuss areas where audit team should focus in these circumstances.

Answer & Explanation:

Some areas that internal audit should focus on when auditing the use of latest technologies in systems: Security and Privacy: With the use of latest technologies, there is an increased risk of cyber threats and data breaches. Internal audit should ensure that the systems are secure and that appropriate measures are in place to protect sensitive data. This includes an assessment of the security protocols, encryption, access controls, and other security measures. Governance and Management: Internal audit should review the governance structure in place to ensure that there are adequate controls and oversight of the technology initiatives. This should include an assessment of the roles and responsibilities of key stakeholders, including the board, senior management, and the IT team. Additionally, internal audit should review the policies and procedures. System Development Life Cycle: Internal audit should ensure that appropriate controls are in place throughout the system development life cycle, from design to implementation to maintenance. This includes an assessment of the testing and validation procedures, as well as the change management process. Business Continuity and Disaster Recovery: Internal audit should ensure that appropriate measures are in place to ensure business continuity in the event of a system outage or disaster. This includes an assessment of the backup and recovery procedures, as well as the disaster recovery plan. Compliance: Internal audit should ensure that the use of latest technologies is compliant with applicable laws and regulations. This includes an assessment of the data protection laws, industry- specific regulations, and other compliance requirements. In summary, internal audit should focus on security and privacy, governance and management, system development life cycle, business continuity and disaster recovery, and compliance when auditing the use of latest technologies in systems. By doing so, internal audit can help to ensure that the risks associated with the use of these technologies are effectively managed and that the organization is able to leverage the benefits of these emerging technologies.

Topics: Internal Audit

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