Strengthening Internal Audit and the Role of Audit Committees in Central Banks
Since the global financial crisis, central banks were called upon to take a more active role in crisis resolution and attributed broader mandates and accountabilities, including on financial stability. As a result of their greater involvement in policy areas beyond their primary objective of price stability, their operations are also under greater scrutiny.
What it was about
Entrusted with a public responsibility and being given political, operational, and financial independence, central banks strive to act and communicate transparently on their activities to different stakeholders. A cornerstone of this approach is their investment into strengthening internal and external governance.
Governance, as commonly understood as arrangements between boards, management, and other external and internal stakeholders, sets a structure through which objectives are agreed. In principle, it should also define the ways to achieve them, support their pursuit, as well as facilitate effective monitoring. With an effective governance system in place, central banks are able to reassure different stakeholders, i.e. the government, general public, and the economy and financial markets, on the conduct of policies and achieving objectives.
At this learning initiative we discussed how different functions of the central banks contribute to effective governance. Among various functions, we looked into roles and work of internal audit, role of external audit, and discuss a specific role and set up of audit committees.
Emphasizing on functions mentioned, we explored connections of these functions with other typical governance functions in central banks: board, other committees and advisory bodies, management.
This workshop provides an overview of functions in support of good governance and its role in the wider context of central bank governance:
- What are corporate governance principles
- How do corporate governance principles apply to the public sector
- How do these principles apply to the central banks
- What is the role of external auditors in central banks
- How do they interact with internal auditors and the board or its committees, such as the audit committee
- What is the role of internal auditors in central banks
- What are the pros and cons of various governance structures to support accountability
- Role of audit committees (and other internal and external oversight bodies), their mandate and composition;
- Steps for enhancing internal audit’s role.
Darko Dolinar, Internal Audit Director, Bank of Slovenia
Before heading the Internal Audit Department, Darko worked as an IT auditor in the same institution. He is familiar with evaluating policies, risk assessment, and business process design and analysis. Experiences include the local audit as well as joint international audit engagements together with peers from other central banks members of ESCB (European System of Central Banks). He started his career as an IT staff member – programmer, moved through information system and database administration, and then he moved into banking industry as an IT auditor and now CAE.
In recent years, Bank of Slovenia on its own and as a member of the Eurosystem has played an important role in providing technical support to central banks in the Western Balkans. Within this framework, Darko has provided technical assistance to the central banks of Albania, Kosovo, Montenegro, Serbia and FYR Macedonia. Occasionally he gives presentations at the professional events.
He obtained a Bachelor Degree in Organizational Sciences, with specialization in Organizational Informatics. During his professional career, he has attended many courses in the IT field, information security (ISO27001), project management, and internal auditing. He passed the CISA exam in 2005 and CIA in 2011.
Katarina Kadunc, Audit Director, Deloitte
Katarina joined Deloitte in 2003. Katarina is also the leader of the Centre of Excellence in Corporate Governance for Deloitte Adriatic and an active lecturer. She gives lectures on corporate governance within the Deloitte Academy and is responsible for managing assessments of quality of internal audit function and of supervisory board performance. Her key clients are Nova KBM Group, Deželna banka Slovenije, Banka Slovenije, Gorenje Group, Petrol Group, Zavarovalnica Triglav, Vzajemna d.v.z. and Mercator d.d.. She is actively involved in development of internal audit in Slovenia, regularly presents or attends internal audit annual conference. Themes as corporate governance, role of internal auditors are her regular topics for presentation at Deloitte Academy for clients, internal Deloitte trainings and at seminars organized by SDH.
Katarina graduated from the Faculty of Economics in Ljubljana (with a major in finance, accounting and audit) and completed her studies at the Slovenian Institute of Auditors, receiving the title Certified Auditor. She acquired the ACCA license in 2009 and the title of CIA of the Slovenian Institute of Auditors in 2014.
Marie-Therese Camilleri, Senior Program Advisor, Center of Excellence in Finance
Nihad Nakaš, Senior Program Advisor, Center of Excellence in Finance
With support from workshop participants who hold interventions in a form of shorter presentations.
Boštjan Jazbec, Governor, Bank of Slovenia
Who was it for
The workshop was primarily designed for staff involved in corporate governance facilitation and design. Members of Audit Committees, or other oversight bodies, and internal auditors, were welcomed. The workshop was also relevant for those engaged in corporate governance like Governor's Cabinet Heads, Board Secretariats, and Heads of Legal Services are highly appreciated and for employees working on financial reports.
The workshop was delivered in English, and highly interactive, providing practical and workable solutions elaborated through a mix of expert-based learning, hands-on operational experience, and interventions of systematic exchange of knowledge and regional experience.
This learning initiative was supported by: