Understanding and Auditing Investments and Derivatives Activities

Course Details:
Understanding and Auditing Investment and Derivative Activities

We are very excited to combine two of our popular classes into one virtual seminar. For this new special offering, we have combined Understanding and Auditing Investment Activities and Understanding and Auditing Derivative Strategies. We have heard from several of our clients that they would like to attend both virtual classes, but it is difficult to commit to four days.  Therefore, we have combined the classes into three days but have not lost the critical training concepts of either class.

In this seminar you will gain a basic understanding of investment and derivative terminology, the strategies entered by portfolio managers/investment managers/traders, and the core processes used in the risk management, back-office operations. and accounting.

You will examine front-office, back-office, and middle-office activities, control objectives, red flags, and internal control best practices. In addition, you will learn to differentiate between derivative hedging and speculating activity. which is so critical in the highly volatile market we are in.

The class will pay special attention to identifying the specific risks common to investment and derivative strategies and cover how to minimize those risks with strong compliance and independent risk oversight. Finally, we will learn about critical risks and controls that need to be in place and the audit scope, objectives, and critical audit steps we need to ensure we have included in our audit programs.

COURSE OUTLINE:

 Introduction to Investment and Derivatives

  • The importance of Auditing Investments and Derivatives
  • Understanding the different markets and where we need to focus our time as auditors.

 The Investment and Derivative Infrastructure

  • Understanding the roles of the front office.
  • Reviewing the Risk management and Middle Office responsibilities.
  • Discussing the critical Back office, Accounting and Reporting responsibilities.

Understanding Traditional Investments Markets

  • Understanding the short-term market:
    • Treasuries/Agencies
    • Commercial Paper
    • Repurchase Agreements
  • Reviewing major securities in capital markets:
    • Bonds
    • Equities
    • Alternatives
    • Real Estate

Understanding the Derivative Environment

  • The importance of reviewing derivatives
  • Introduction to derivative risk management

 The Forward and Futures Contracts

  • Defining the forward contract
  • Defining the futures contract
  • Working through Forward and Future Strategies

 The Option Market

  • Fundamentals of options
  • Strategic use of options

 The Swap Market

  • Swap mechanics
  • Swap terminology
  • Understanding financial swaps examples
  • The mechanics of swaptions

Analyzing Investment and Derivative Risks

  • Management risk
  • Market risk
  • Credit/counterparty risk
  • Legal risk
  • Operational risk

Auditing Investments and Derivatives

  • Identifying Audit objectives and Scope Considerations.
  • Defining the critical risk and internal controls.
  • Discussing and summarizing critical audit steps to include in your audit programs.
  • Red flags discovered in your audits and defined approaches.
Course Duration: 2.5 day(s)
CPE Hours Available: 20
Field of Study: Accounting (2), Auditing (10),  Specialized Knowledge (10)
Program Level: Intermediate
Prerequisites: ​General Knowledge of Audit & Investments
Advance Preparation:      None
Delivery Method: Group Live or Group-Internet Based 
Investment Training and Consulting Institute, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credits. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.nasbaregistry.org.
Attendance Requirements: In order to be awarded the full CPE hours, attendees must complete at least 3 attendance monitoring mechanisms (codewords, polls, etc) per CPE hour.
Policy Information: For more information regarding how to register for a course, refund, program cancellation, complaint resolution policy and other frequently asked questions, please visit our Q&A page or contact our office at 785-783-8201.