Deposit Protection Audits on Member Institutions
The deposit protection audit is the essential preventative tool of the Deposit Protection Scheme of the private banking sector. Potential threats to the security of customer deposits at member institutions are to be detected at an early stage via these audits.
The Auditing Association carries out regular audits on the member institutions and is authorised at any time, even without prior appointment, to conduct deposit protection audits. The audits are to determine whether there exist any potential threats at the bank being audited to the secured deposits or, whether there is any doubt concerning the appropriateness of the deposit protection limit.
As a result of the deposit protection audit, the Auditing Association is able to offer the audited bank advice and recommendations to eliminate any potential threats determined. In the event of serious complaints, the Auditing Association has the authority to impose conditions, the abuse of which can result in the exclusion of the bank concerned from the Auditing Association.
Every audit is geared to the individual risk structure
In the case of newly admitted institutions, deposit protection audits are initially carried out in the form of a complete audit and thereafter generally in the form of partial audits. The focal points of the audits are thus based on the individual bank’s risk structure and, for example, include the business model, risk management, recoverability of assets (e.g. credit portfolio and security holdings) as well as liability risks (e.g. from financial consulting or asset management).
The audits are designed as a combination of test of controls and substantive procedures. This means that besides the individual business risks, internal control and risk-management systems relating are constantly analysed and assessed with regard to their appropriateness and functionality.
Details regarding the auditing activity on member institutions as well as possible audit requirements for former members are regulated in the Articles and in the Auditing Association Audit Guidelines.
Deposit protection audits
Early detection of any the potential threat to the security of customer depositsComment and recommendations on how to avoid risks at member institutionsImposition of conditions in the event of serious complaints
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