The Nigeria Deposit Insurance Corporation will soon begin a risk-based audit of the banking sector.

The move, it was learnt, became imperative in order to detect transactions that served as potential risk to the financial sector.

To keep auditors of the corporation abreast with the latest auditing techniques, a three-day workshop commenced in Abuja on Tuesday.

The Managing Director, NDIC, Alhaji Umaru Ibrahim, who declared the workshop opened, expressed optimism that the move was in line with international best practices.

He said that some members of staff of the corporation had been sent to Malaysia and Kenya to acquaint them with how those countries handled their audits, using the RBA approach.

Represented by the Executive Director, Corporate Services, NDIC, Mrs. Lola Abiola-Edewor, Ibrahim said, “Our experiences in these countries have spurred us to organise training for other staff of the corporation in risk-based auditing.

“The programme is aimed at exposing and equipping participants with the international best practices on enterprise risk management, internal control as well as compliance with legal requirements.”

The corporation had last week explained why it was adopting the risk-based supervision model for the banks.

The RBS is a proactive and efficient supervisory process, which focuses attention on the risk profile of the supervised financial institutions and enables the bank supervisors to develop a supervisory package for each bank.

The bank supervisors, Ibrahim said, would also efficiently allocate resources based on the risk profile of individual banks and proactively monitor and supervise the banks in order to promote safety, soundness and stability of Nigeria’s financial system.

The RBS also presents a framework with which banks are assessed on the basis of impact of their risks rather than on intuitive assessment.

In contrast to the transaction and compliance-based approach to supervision, the RBS treats risks mitigating and offsetting as valid approaches to risk management.

Source: Punch/Ifeanyi Onuba