TREASURY RISK REGISTER

EVENT OWNER UBAID MUHAMMAD HANIF

AUDITOR INTERNAL AUDIT TEAM
AREA TREASURY

Inherent Risk Residual Risk

Area Risk Description Potential Impact Risk Category Observation Current controls, if any Risk Response Recommendation

Likelihood

Likelihood
Impact

Impact
Risk Score

Treasury Policy
Risk Score
Lack of documented policy for treasury 1) Lack of guidelines on investment in allowed financial Strategic It has been observed that there is no treasury Almost certain Moderate Almost certain Moderate Recommendation shall be to develop a comprehensive
operations instruments for high level of diversification Financial management policy in place. treasury management policy for the following:
2) Possible speculative transactions a. minimising cost of debt, and maximise returns on
3) Higher rate on borrowings and other bank financing investments, within prudent risk parameters.
4) Lost oppurtunity on high earning investment ventures b. identifying and effectively managing financial risk, and
c. prohibiting speculative treasury decisions

The policy should be exhaustive enough to provide

procedural guidelines for the management of credit risk ,
liquidity risk, interest rate risk, funding risk, foreign
exchange risk and other operational risks.

Business Continuity Plan
Lack of business continuity plan in place.
1) Disruption in client servicing and project management Strategic It has been observed that there is no business Almost certain Moderate Almost certain Moderate It is recommended to have a business continuity plan for
2) Absence of treasury critical staff in risk management, Financial continuity plan in place to make sure that the treasury function to help achieve the corporate
dealing and back office processing. company keeps making money in the event of visions and strategic goals and objectives.
3) Lack of real time response disruptions to core business.
4) Lack of mobility in terms of alternative access to treasury
systems

Segregation of duties
No segregation of duties for passing accounting Controls not serving an automatic and independent check on Financial It has been observed that currently there is no Almost certain Low Almost certain Low Company should be segregating such responsibilities.
entries other's work. segregation of duties with respect to passing of Segregation of duties leads to following advantages:
accounting entries for treasury operations. The 1) Oversight to correct possible errors.
team handling the treasury operations is the one 2) Preventing possible fraud.
passing the accounting entries as well in respect
of that.

Investments No policy in place for investing surplus funds 1) Losing interest earned on surplus funds investment. Strategic It has been observed that there is no policy for
2) Losing oppurtunity of using interest earned to reduce short Financial investing surplus funds in financial instruments.
term borrowings. Currently cash deposits in banks do not earn any
interest and surplus funds are invested in time
deposits only and not other financial instruments.
Possible Moderate Possible Moderate Company should design and implement a financial
investment policy covering the following:
1) The category of financial instruments to be possibly
used for investment.
2) Undertaking the risk assessment and its monitoring
with respect to investments made so that loss of capital
investment is taken care.
3) Define the limits for investment by category of
financial instruments
4) To ensure that dividends and sales proceeds from
investments are appropriately used in reducing the short
term borrowings or reinvested in more profitable
financial investments products or properties for future
rentals.

Key Performance Indicators No setting of key performance indicators for the 1) Clear definition of what goals are to be achieved. Strategic It has been observed that currently the company Almost certain Moderate Almost certain Moderate Company should be developing and setting the KPIfor the
treasury function 2) Clear vision of the performance has not set any key performance indicators for the treasury function.
treasury function.