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Noise by Kahneman, Sibony and Sunstein: Summary and Lessons for Auditors
Kahneman, Sibony and Sunstein on unwanted variability in judgment, summarised for auditors: the error equation, level, pattern and occasion noise, the evidence and its critics, decision hygiene, a…
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31–47 minutes -
Auditing the Underwriting Process: Where Credit Risk Is Born and How to Test It
Every credit loss a lender ever takes was approved by someone, on some day, against some policy, and the underwriting process is where the decision was made. This…
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22–33 minutes -
PD, LGD and EAD Explained: The Building Blocks of Credit Risk Measurement
Every quantitative statement about credit risk rests on three parameters: the probability that a borrower defaults (PD), the share of the exposure lost when it does (LGD) and…
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20–30 minutes -
Credit Risk: Ratings, PD/LGD/EAD, CECL, Capital and How Internal Audit Tests It
The Risk Library reference on credit risk: the six forms of the risk, the lifecycle from underwriting to workout and the control at each stage, risk ratings and…
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22–33 minutes -
OCC Risk Categories: The 8 Risk Stripes Explained
For decades the OCC supervised US national banks through eight risk categories, often called risk stripes: credit, interest rate, liquidity, price, operational, compliance, strategic, and reputation. Since 2025…
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The Big Short by Michael Lewis: Summary and Lessons for Auditors
Lewis’s account of the investors who saw the subprime collapse, summarised for auditors: the machine, the people, the timeline, the incentives, a vocabulary, an audit map and a…
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18–27 minutes -
Auditing Credit Risk: Scope, Tests, and Red Flags
Auditing credit risk comes down to four tests: independently re-grading a judgmental sample of loans, testing underwriting and policy exceptions, validating watchlist and rating-migration governance, and assessing the…
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19–28 minutes -
Navigating Credit Risk: Insights for Internal Auditors
In the dynamic landscape of the financial industry, credit risk management holds utmost significance. As financial institutions extend credit to borrowers, the potential for default and financial loss…
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6–8 minutes