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Practice Guide: Auditing Market Risk in Financial Institutions
Recommended Guidance

Practice Guide: Engagement Planning: Establishing Objectives and Scope

Market risk has always been considered a key risk for financial services organizations. Regulators and supervisors are focused on this risk, emphasizing the need for accurate models that can measure the capital impact of market activities on the financial viability of the institution.

These requirements and supervisors’ expanded expectations are giving internal audit a more relevant and active role in the assessment of market risk.

This guidance will enable internal auditors to understand:

  • The importance of market risk in a financial services context.
  • The regulatory environment and requirements related to market risk.
  • The risk governance and risk management processes surrounding market risk.
  • How to articulate the key components of market risk, including interest rate risk, equity risk, and foreign exchange risk.
  • How to apply the IPPF and risk-based internal audit techniques to assess and audit market risk in their organizations.


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