The internal control framework in Russian Agricultural Bank comprises various types of control carried out by all employees and with the use of IT systems as part of business processes at different organizational levels (from front desk officer to senior management).
Internal Control ensures that rules and regulations are incorporated in the Bank’s business procedures based on risk-oriented approach. These types of control cover all major risk zones in carrying out all banking operations and throughout the management hierarchy.
The internal controls framework is aimed at increasing the Bank’s operational efficiency. In other words, it is designed to help the Bank deliver on its strategic and operational targets.
As per the Bank’s Articles of Association the Internal Control framework comprises:
Governing Bodies: the General Shareholders' Meeting, the Supervisory Board, the Management Board, Chairman of the Board and CEO
The Revision Commission
The Chief Accountant and his deputies
Directors and chief accountants of branches.
Internal Control units and officers within the authority set by internal regulations, incl.:
Internal audit service
AML/FT Officer (Financial Monitoring Service)
Controller for professional securities market participant
Other units and officers involved.
Internal Control bodies carry out various types of control based on their tasks and targets.
The Bank adheres to the principle of independence of its internal control bodies. The Head of Compliance Department is appointed and relieved of his position by the Chairman of the Management Board. The Internal Audit Service operates under direct control of the Supervisory Board. Its primary objective is to provide the Bank with assurance as to the effectiveness and efficiency of the risk management, control and governance processes.
Internal Audit Service is in charge of internal control of the Bank’s operations to ensure:
economic feasibility and effectiveness of the Bank’s deals and operations, asset-liabilities management efficiency, incl. ensuring the preservation of assets, risk management efficiency;
authenticity, completeness, reliability and timeliness of accounting, financial, and statistical reporting (for internal and external users), and information security (protection of the Bank’s interests) in the information sphere;
compliance with legislation, self-governed organizations standards (for professional markets participants), statutory documents and internal Bank’s regulations;
pre-empting the involvement of the Bank and its employees in illegal acts, incl. AML/FT, and timely reporting on such activities to authorities and the Bank of Russia.
The main focus areas within the competence of the Internal Audit Service are as follows:
Supervision of the internal control and risk management systems in the Bank and the Banking Group entities;
Monitoring of internal control system in the Bank.
The Internal Audit Service annual audit plan includes a schedule of audits and is drawn up based on the risk assessment procedures adopted by the Bank’s management. When drawing up the audit schedule the Internal Audit Service takes into account the periodic timeframe of carrying out audits which takes into account changes in internal control framework in internal units and the Bank at large.