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Liquidity Risk Management

Course Description

This course will describe internal audit's role in the world of liquidity risk management. Liquidity is a measure of the ability and ease with which assets can be converted to cash. To remain viable, a financial institution must have enough liquid assets to meet its near-term obligations. Internal audit plays a vital role in ensuring compliance with the Basel III regulatory framework, which was adopted by the Federal Reserve to ensure adequate capital in the banking system. This course helps learners to gain an understanding of Liquidity Risk Management (LRM), Basel III​​​ regulatory requirements, and the role of banking supervisors. It also provides details on the impacts of Three Lines of Defense over the LRM framework and governance in financial institutions. Finally, the course describes various liquidity-specific aspects of an internal audit engagement, including audit planning and risk assessment. 

Learning Objective(s):

  • Recognize the elements of Basel III.
  • Recognize the elements and considerations of liquidity risks.
  • Summarize internal audit’s role with liquidity risk management.
  • Recognize elements of an organization's asset and liability committee.
  • Discern how liquidity risk appetite and risk tolerance shape the internal audit engagement.
  • Differentiate the purpose and roles of each part of the three lines of defense.
  • Assimilate the elements of LRM methodology.
  • Recognize methods of evaluating liquidity risks during an engagement. 
Course Duration: 1 day(s)
CPEs Available: 1
Knowledge Level: Basic
Field of Study: Auditing
Advance Preparation: 
Delivery Method: QAS Self-Study