Internal Audit

The Internal Audit is an independent appraisal mechanism established to examine and evaluate the effectiveness of the risk management, control and governance processes of Alfa-Bank, its subsidiaries and related companies.

The objective of the Internal Audit is to assist the Board of Directors and the Management of Alfa-Bank, its subsidiaries and related companies in the effective achievement of their goals. To this end, the Internal Audit provides them with analyses, appraisals, recommendations, counsel and information concerning reviewed activities.

The Internal Audit encompasses the examination and evaluation of the adequacy and effectiveness of the system of internal control and the quality of performance in carrying out assigned responsibilities in Alfa-Bank, its subsidiaries and related companies via the coordination of internal audit efforts. In particular, internal auditors:

  • Review the reliability, integrity and timeliness of financial and operating information and the means used to identify, measure, classify and report such information.
  • Review the established system to ensure compliance with those policies, plans, procedures, laws and regulations which could have a significant impact on operations and reports, and to determine whether the organisation is in compliance.
  • Review the means of safeguarding assets, and as appropriate, verify the existence and value of such assets.
  • Appraise economy and efficiency with which resources are employed.
  • Review projects and programmes to ascertain if results are consistent with established objectives and goals and whether they are being carried out as planned.
  • Carry out audits, investigations and reviews as requested by the Audit Committee.

Reporting lines

Internal auditors render impartial and unbiased judgments about reviewed activities. In order to provide independence, the Director of the Internal Audit is appointed/dismissed by the Audit Committee.

The Internal Audit operates according to the directives of the Board of the Directors (or the Audit Committee between BoD sessions). However, it reports on an administrative level to the Chief Executive Officer of the Bank.

Relationships with other audit and control units

The external auditor is advised of and has access to relevant internal audit reports, and is kept informed of any significant matters that come to the internal auditor’s attention that may affect the work of the external auditor. Similarly, the external auditors will inform the internal auditor of any significant matters that may affect internal auditing.

The Internal Audit may and should be useful in determining the nature, timing and extent of external auditing activities. However, the external auditor has the sole responsibility for the audit opinion on financial statements.

The existence of additional departments within the organisation for controlling or monitoring specific activities does not relieve the internal audit department from examining those specific activities. Examples of such departments are Risk Management and Internal Control. However, for the sake of efficiency, the Internal Audit Department may use information reported by those control departments in carrying out its tasks.

Standards

The Internal Audit Department follows the Standards for the Professional Practice of Internal Auditing and Code of Ethics issued by The Institute of Internal Auditors.