Compliance Risk

In February of 2017 I posted an Excel spreadsheet called “Internal Audit – Interactive Report”. With the newer functions in Excel, I thought I might try a different approach. I used nine boxes to graphically show which areas in the bank or credit union have the most risk to the organization. First, I listed various areas that had high, medium, or low risk. I assigned the risk category numbers from 1 to 3, with 1 being the lowest and 3 the highest risk. In addition, I did the same with the likelihood of each area in the organization being a problem.

 

For example, the General Ledger might have a substantial risk if errors were made, but the likelihood of a major problem was small. Therefore, I would give the General Ledger a 3 for risk and a 1 for likelihood of a problem. The idea is to create a form that divides up the risk / likelihood as below:

 

All the areas of the organization are compiled and rated into a table (called T) in the sheet called “Data”. Then in the “Box” sheet I used the Filter function to divide up the groups into their appropriate box. The filter function looks like:

 

FILTER(T[Departments],T[Both]=F5,”NONE”)

 

This spilled each area of the organizations into its appropriate box. If you have the responsibility of compliance in your firm, this sheet could be used to show management, or the board, which areas need the most time and effort to evaluate.

Download: Compliance_Risk

Don Pistulka
Don Pistulka

Retired Credit Union CFO - Finance
Background: over 40 years in investments, asset/Liability management, banking, securities trader.
Worked for: California Credit Union, WesCorp, CalFed S&L, Crocker Bank, Carroll McEntee, Federal Home Loan Bank Board (D.C.), Western Asset Management, Security Pacific National Bank.

Leave a Reply

Your email address will not be published. Required fields are marked *