CH18-Treasury Policies & Procedures

Question 1

5 primary reasons treasury policies and procedures are necessary

Answer 1

1. Organizational needs
2. Risk management
3. Define Roles and Responsibilities
4. Compliance
5. Governance

Question 2

Correctly designed controls must consider

Answer 2

1. internal and external controls
2. reporting and audit trails
3. controls on Third Party Service providers
4. compliance with SOX 404, stock exchange regulatory requirements

Question 3

What is achieved by a Board resolution outlining position responsibilities?

Answer 3

Delegation of authority

Question 4

What is a key control that can reduce fraud and error risks?

Answer 4

Segregation of Duties

Question 5

What comes first - policy or procedure?

Answer 5

Policy first, Procedure second

Policies drive procedure development.

Question 6

The policy development process

Answer 6

1. Pre-development = get highest level support, assign leader with accountability
2. Identify issues and conduct analyses = include all areas, create flowchart
3. Draft the Policy = what, not how; make readily available; identify SME

Question 7

10 Basic Elements of a Policy

Answer 7

1. Objectives
2. Scope
3. Basic guidelines - expectations
4. Roles and responsibilities
5. Performance measurement and reporting
6. Controls and compliance
7. Name who can approve Exceptions
8. Review cycle
9. Definitions
10. Policy attachments

Question 8

The general risk of intentional employee fraud is known as

Answer 8

defalcation risk

Question 9

the specific case of theft of money, securities or property by an employee is known as

Answer 9

fidelity risk

Question 10

Proper segregation of duties significantly reduces which category of risk?

Answer 10

fidelity risk

Question 11

The structure of the specific treasury policy and procedures documents will need to reflect ________________.

Answer 11

department practice

Question 12

What is the key objective of the consultation phase of policy development?

Answer 12

Develop a workflow of existing practices and identify where risk points occur

Question 13

T/F: Exceptions should be allowed but there should be some documented segregation of duties involved

Answer 13

True

Question 14

Who should conduct Investment policy reviews ?

Answer 14

Internal and/or External Auditors

Question 15

Key issues to be addressed in an outsourcing policy include:

Answer 15

1. Delegation of authority
2. Vendor and operational risk management
3. Information security and confidentiality requirements
4. Performance measurement, including compliance with relevant existing company policies
5. Termination of outsourcing contract