internal auditing checklist for treasury function
1. Governance and Oversight
- Examine reporting lines and hierarchy.
- Identify key roles and functions within treasury.
- Ensure clarity in roles to avoid overlaps.
- Assess alignment with industry best practices.
- Review job descriptions for clarity and relevance.
- Assess performance metrics for treasury personnel.
- Ensure that roles support operational efficiency.
- Identify gaps in responsibility coverage.
- Review existing policies for comprehensiveness.
- Ensure policies are updated to reflect current practices.
- Evaluate compliance with regulatory requirements.
- Identify areas needing additional procedures.
- Assess the timeliness of treasury reports.
- Evaluate the relevance and clarity of report content.
- Ensure reports address key treasury metrics.
- Identify improvements for reporting processes.
- Review approval workflows for efficiency.
- Ensure clear criteria for transaction approvals.
- Assess documentation requirements for approvals.
- Identify bottlenecks in the approval process.
- Review roles involved in key treasury processes.
- Ensure no single individual has conflicting responsibilities.
- Assess controls to enforce segregation policies.
- Identify potential risks from current structures.
2. Cash Management
- Examine historical cash flow data.
- Compare forecasts to actual cash flows.
- Identify trends and anomalies.
- Assess the methodologies used for forecasting.
- Ensure alignment with business operations.
- Review bank account opening and closing procedures.
- Assess the number of accounts and their purposes.
- Evaluate bank relationship management practices.
- Check for compliance with banking agreements.
- Analyze fee structures and service levels.
- Review policies for cash disbursements.
- Verify segregation of duties in cash handling.
- Evaluate the approval process for transactions.
- Check for documentation and authorization of receipts.
- Assess monitoring and reporting mechanisms.
- Review the frequency of reconciliations.
- Ensure reconciliations are timely and accurate.
- Check for discrepancies and their resolutions.
- Assess the documentation for reconciliations.
- Evaluate the effectiveness of review procedures.
3. Investment Management
- Review current investment policies for alignment with regulatory requirements.
- Check for updates or changes in regulations affecting investment activities.
- Ensure policies are communicated to relevant stakeholders.
- Document any compliance gaps and recommend corrective actions.
- Analyze performance reports against benchmarks.
- Assess consistency in performance measurement methodologies.
- Identify underperforming assets and investigate causes.
- Ensure regular reporting and review processes are in place.
- Evaluate current risk assessment frameworks and tools.
- Review stress testing results and their implications.
- Check for diversification strategies to mitigate risks.
- Ensure compliance with risk limits set by the organization.
- Ensure all investment proposals have documented justifications.
- Review approval chain for investment decisions for completeness.
- Check that all relevant stakeholders are involved in approvals.
- Confirm that documentation is stored securely and is easily accessible.
4. Debt Management
- Identify all existing policies.
- Ensure policies align with regulatory requirements.
- Check for updates or revisions in policies.
- Review approval processes for debt issuance.
- Assess clarity and accessibility of policies.
- List all debt covenants in place.
- Review compliance monitoring processes.
- Verify adherence to financial ratios.
- Document any instances of non-compliance.
- Evaluate remedies and corrective actions taken.
- Identify current interest rate exposure.
- Review strategies for managing interest rate risk.
- Assess refinancing options and timing.
- Evaluate historical effectiveness of strategies.
- Document any assumptions used in evaluations.
- Review debt ledgers and records for completeness.
- Cross-check with external statements and contracts.
- Evaluate the processes for updating records.
- Assess the frequency of reconciliations.
- Document any discrepancies found.
- Review strategic objectives related to debt.
- Evaluate how debt supports financial goals.
- Assess alignment with risk tolerance levels.
- Document stakeholder input on strategies.
- Identify any gaps in strategic alignment.
- Evaluate the methodologies used for forecasting.
- Check historical accuracy of forecasts.
- Assess input data quality and sources.
- Review timelines for forecasting processes.
- Document changes in future borrowing needs.
- Review historical issuance timelines.
- Assess decision-making processes for timing.
- Evaluate market analysis conducted prior to issuance.
- Document outcomes compared to projections.
- Identify lessons learned from past issuances.
- Review selection criteria for underwriters/advisors.
- Assess the competitive bidding process.
- Evaluate performance of selected firms.
- Document rationale for selections made.
- Check compliance with procurement policies.
- Review credit rating reports.
- Assess debt level trends over time.
- Evaluate cost implications of current debt.
- Document communication with rating agencies.
- Identify strategies to improve credit ratings.
- Assess the frequency of stakeholder communications.
- Evaluate the clarity of communications.
- Review feedback mechanisms from stakeholders.
- Document any issues raised by stakeholders.
- Check compliance with disclosure requirements.
- Identify risk monitoring tools used.
- Evaluate the adequacy of risk mitigation strategies.
- Review reporting processes for risk management.
- Assess training provided to staff on risk.
- Document any identified gaps in risk management.
- Review repayment schedules against actuals.
- Assess flexibility of repayment strategies.
- Evaluate the impact of economic factors on repayments.
- Document any changes to repayment plans.
- Identify areas for improvement in strategies.
- Identify all derivatives and hedging instruments in use.
- Assess the effectiveness of these instruments.
- Review documentation for compliance with regulations.
- Evaluate the impact on overall risk profile.
- Document any changes in hedging strategies.
- Review reporting frequency and formats.
- Assess the accuracy of reported information.
- Evaluate the timeliness of reports.
- Document any discrepancies in reporting.
- Identify areas for enhancement in reporting.
- Review documentation of restructuring events.
- Assess compliance with legal requirements.
- Evaluate stakeholder communication during restructuring.
- Document outcomes and lessons learned.
- Identify processes for future restructurings.
5. Foreign Exchange and Risk Management
- Review current policies for clarity and comprehensiveness.
- Ensure procedures align with industry best practices.
- Identify gaps or inconsistencies in the current framework.
- Evaluate the frequency of policy reviews and updates.
- Assess training programs for staff on these policies.
- Analyze historical performance of hedging strategies.
- Compare results against benchmarks and market conditions.
- Identify any missed opportunities or losses.
- Assess the appropriateness of instruments used.
- Review alignment with overall risk management objectives.
- Ensure all transactions are documented accurately.
- Verify contracts contain necessary terms and conditions.
- Check for completeness of supporting documentation.
- Assess consistency in reporting formats and practices.
- Evaluate retention policies for documentation.
- Identify relevant regulations applicable to transactions.
- Review procedures for monitoring compliance regularly.
- Ensure reports are submitted accurately and timely.
- Assess training provided to staff on compliance matters.
- Evaluate the response to any regulatory changes.
6. Compliance and Regulatory Adherence
7. Technology and Systems
8. Reporting and Performance Measurement
- Verify reporting schedules align with management needs.
- Ensure reports are generated consistently and timely.
- Check for accuracy by comparing figures with source data.
- Assess clarity and comprehensiveness of reports provided.
- Identify KPIs currently in use by the treasury function.
- Evaluate relevance of KPIs to organizational goals.
- Analyze historical performance data against KPIs.
- Propose adjustments or new KPIs if necessary.
9. Continuous Improvement and Recommendations
10. Documentation and Record Keeping
- Check for all required documents.
- Ensure data consistency across records.
- Validate mathematical accuracy in calculations.
- Confirm alignment with regulatory requirements.
- Identify and rectify any discrepancies.
- Review current policies against legal standards.
- Determine retention periods for different documents.
- Evaluate compliance with internal procedures.
- Ensure secure storage of sensitive records.
- Plan for regular reviews and updates.
- Check for appropriate approvals for each transaction.
- Ensure documentation includes necessary details.
- Confirm signatures and authorization levels.
- Review transaction logs for completeness.
- Investigate any missing documentation or approvals.
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