NEW! Financial Derivatives : An Introductory Course for Internal Auditors

Focus & Features

The International Standards for the Professional Practice of Internal Auditing (the "Standards"; Standard 1210 on Proficiency) requires that internal auditors must possess the knowledge, skills, and other competencies needed to perform their individual responsibilities. Similarly, the internal audit activity is expected to collectively possess or obtain the knowledge, skills and other competencies needed to perform its responsibilities. In addition, Standard 1230 on Continuing Professional Education requires that internal auditors must enhance their knowledge, skills, and other competencies through continuing professional development.

In this course, the participants will obtain the necessary knowledge and skills as required by the Standards in understanding basic financial derivatives such as forwards, futures, swaps and options, which will be highly valuable in effectively conducting review and audit of financial transactions, investment activities, or risk management practices that involve these derivative instruments. The course will provide fundamental concepts and principles about financial derivatives in general (versus spot/cash market instruments), as well as the mechanics of each of these basic derivative instruments. The course will also demonstrate practical and easy-to-understand application of these instruments depending on the organization's needs, objectives and requirements.

Course Objectives:

At the end of the Course, the participants shall be able to:

• Define financial derivative and explain its basic characteristics;
• Distinguish financial derivatives from other cash market instruments;
• Learn and understand the concepts/principles, mechanics and uses of forwards, futures, swaps and options;
• Distinguish each derivative instrument from one another based on defined characteristics; and
• Learn the practical application to any organization of these derivative instruments.

What You Will Learn

I. Introduction to Derivatives

• What it is not
• Definition
• Characteristics
• Derivatives versus other financial (cash market) instruments
• Broad categories and types of derivative instruments
• Uses of derivatives

II. Forwards/Futures

• Definition
• Types (Outright versus non-deliverable forwards)
• Characteristics/Key features (Forwards versus Features)
• Application/Uses
• Forward Pay-off
• Benefits/Limitations

III. Swaps

• Definition
• Types
• Foreign Exchange Swap

i. Uses

ii. Mechanics

iii. Application

• Interest Rate Swap

i. Uses

ii. Mechanics

iii. Application

• Cross Currency Swap

i. Uses

ii. Mechanics

iii. Application

IV. Options

• Definition
• Terms of an option contract
• Types of Option
• Option pay-off
• Moneyness of an Option
• Application