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Auditors’ Approach to Auditing the Asset/Liability Management (ALM) Function
June 12, 2018 @ 12:00 pm - 1:30 pm EDT$249
This 90-minute banking webinar provides an overview of ALM principles and ALM measurement techniques. It focuses on auditor issues and procedures related to the audit of the ALM function.
It covers important ALM topics such as:
- Liability sensitivity
- Monitoring mismatch of maturing interest sensitive assets and liabilities
- Understanding management’s view of the future direction of interest rates
- Reviewing strategies used to react to expected changes in interest rates
- Understanding “immunity”
- Understanding “position management”
- Managing the “gap”
This new bank accounting webinar will review and discuss interest rate risk as well as net gap analysis. It will emphasize the importance of valuing the assets and liabilities at current market prices (fair value approach), as well as the importance of hedging fair value positions. Paul will also discuss the composition of the ALM committee and the decisions expected of that high level committee.
Attention will be focused on ALM committee approaches to interest rate risk management such as:
- Net interest income analysis (NII)
- Net present value analysis (NPV)
Attendees will review examples to help them learn about simulation models, particularly dynamic simulation, and also about the use of “duration” analysis.
Specific auditor issues are addressed, outlining an ALM audit approach that includes:
- Reviewing the ALM policy
- Verifying the numbers used by the committee to make ALM decisions
- Making a real commitment about the future direction of interest rates and how to react to rate changes
- Comparing actual results to expected results
A special part of the coverage includes a review of controls for derivatives.
This great new accounting webinar provides an excellent review of ALM and how the auditor approaches ALM audit coverage.
Date of Event
Tuesday, June 12, 2018
About Paul Sanchez
Paul J. Sanchez, CPA, CBA, CFSA conducts a CPA practice in Port Washington, New York. He is also the owner of Professional Service Associates (PSA), a consulting and professional training and development business servicing corporate clients (auditors, controllers, etc.), CPA firms, professional associations and others. He was an assistant professor at Long Island University – C.W. Post Campus as well as an adjunct lecturer at City University of New York. Prior to starting PSA, he was the Vice President-Professional Development for the Audit Division of a regional bank and Director of Professional Practices and Vice President of a money-center bank, where he directed the professional practice development and training for internal auditors.