Hedge Accounting and Treasury Controls Audit Training Course

Course Introduction

Hedge accounting and treasury activities require strong integration between financial risk management, accounting treatment, transaction controls, valuation processes, documentation, and financial reporting. This course provides a comprehensive audit-focused framework for examining hedge accounting arrangements and treasury controls, helping participants understand how transactions move from risk identification and strategy through execution, measurement, accounting, settlement, and reporting.

The course examines the principles and practical application of hedge accounting, including the relationship between hedging instruments, hedged items, risk management objectives, effectiveness assessment, documentation, and financial statement presentation. Participants will develop the ability to evaluate whether hedge relationships are appropriately established, supported by evidence, consistently monitored, and reflected accurately in accounting records and disclosures.

Treasury controls are addressed across cash management, funding, liquidity, foreign exchange, interest rate risk, investments, derivatives, counterparty management, settlements, reconciliations, and treasury technology. The course emphasizes how auditors can evaluate governance structures, delegated authorities, segregation of duties, transaction controls, confirmations, valuation processes, limit monitoring, collateral arrangements, and exception management within treasury operations.

Participants will also explore audit procedures for identifying weaknesses in hedge documentation, valuation models, market data, effectiveness testing, accounting adjustments, manual journals, reconciliations, and treasury reporting. Particular attention is given to professional skepticism, management judgment, model risk, control overrides, operational errors, and potential manipulation that may affect hedge accounting outcomes or treasury risk reporting.

Modern treasury environments increasingly rely on automated trading platforms, treasury management systems, electronic confirmations, real-time market data, APIs, cloud services, advanced analytics, and artificial intelligence. The course therefore incorporates technology-enabled controls, data governance, cybersecurity, automated reconciliations, continuous monitoring, and emerging risks affecting treasury and hedge accounting assurance.

Through practical case studies, audit scenarios, transaction analysis, control testing, and integrated exercises, participants will develop a structured approach for planning and executing audits of hedge accounting and treasury activities. The course is designed to strengthen audit judgment, evidence evaluation, risk assessment, control testing, findings development, and assurance reporting across complex treasury environments.

Duration

10 days

Who Should Attend

• Internal auditors responsible for treasury, financial risk, accounting, or financial reporting audits.

• External auditors involved in auditing hedge accounting, derivatives, treasury operations, and financial instruments.

• Treasury professionals responsible for controls, risk management, liquidity, funding, and financial market activities.

• Finance and accounting professionals responsible for hedge accounting and financial reporting.

• Risk management professionals overseeing market, liquidity, counterparty, and treasury-related risks.

• Audit managers and supervisors responsible for planning and reviewing treasury assurance engagements.

• Financial controllers responsible for treasury accounting, reconciliations, valuations, and reporting.

• Compliance and control professionals assessing treasury governance and financial risk controls.

• Banking and financial services professionals involved in treasury and hedge accounting assurance.

• Corporate finance professionals managing foreign exchange, interest rate, liquidity, and funding exposures.

• Professionals responsible for treasury management systems, financial data, and automated control environments.

• Audit committee and assurance professionals seeking deeper understanding of treasury and hedge accounting risks.

• Accounting professionals involved in derivative valuation, hedge effectiveness, and financial statement disclosures.

• Risk and control specialists evaluating complex financial instruments and treasury processes.

• Professionals seeking advanced practical skills in auditing hedge accounting and treasury control frameworks.

Course Objectives

• Develop a comprehensive understanding of hedge accounting principles and the audit considerations associated with hedging relationships, instruments, documentation, effectiveness, measurement, and financial reporting.

• Evaluate treasury governance frameworks, policies, delegated authorities, risk appetites, control structures, and accountability arrangements supporting effective treasury risk management.

• Assess the design and operating effectiveness of controls covering cash, liquidity, funding, foreign exchange, interest rate, investment, derivative, and treasury settlement activities.

• Apply risk-based audit methodologies to identify significant risks arising from hedge accounting judgments, treasury transactions, valuation processes, market exposures, and financial reporting.

• Examine hedge designation and documentation to determine whether hedging relationships are appropriately supported by risk management objectives, evidence, and clearly defined control processes.

• Assess hedge effectiveness testing, measurement methodologies, assumptions, data sources, and accounting treatments while identifying potential errors, inconsistencies, and management judgment risks.

• Evaluate treasury transaction controls from initiation and authorization through execution, confirmation, settlement, reconciliation, accounting, and reporting using practical audit procedures.

• Identify weaknesses in treasury segregation of duties, trading authorities, transaction limits, confirmations, reconciliations, access controls, and exception management that may increase financial or operational risk.

• Analyze derivative valuations, market data, pricing models, valuation adjustments, and independent price verification processes to assess the reliability of reported treasury and hedge accounting amounts.

• Use data analytics and technology-enabled audit techniques to identify unusual treasury transactions, reconciliation breaks, valuation anomalies, limit breaches, ineffective hedges, and unusual accounting entries.

• Strengthen professional skepticism when evaluating complex treasury transactions, management assumptions, hedge accounting judgments, manual adjustments, control overrides, and supporting audit evidence.

• Develop integrated audit findings and recommendations that connect control deficiencies, root causes, financial reporting implications, risk exposures, management actions, and ongoing monitoring requirements.

Comprehensive Course Outline

Module 1: Foundations of Hedge Accounting and Treasury Controls Auditing

• Understand the relationship between treasury risk management, hedging activities, accounting requirements, financial reporting, and the auditor’s assurance responsibilities.

• Examine the major treasury processes, financial instruments, risk exposures, control activities, and accounting considerations that shape a hedge accounting audit.

• Identify key audit risks associated with complex treasury transactions, management judgments, valuation uncertainty, documentation weaknesses, and ineffective controls.

• Develop a risk-based audit framework covering governance, transaction processing, valuation, hedge accounting, reconciliations, reporting, and assurance evidence.

Module 2: Treasury Governance, Policies and Risk Appetite

• Evaluate treasury governance structures, board oversight, management responsibilities, policies, mandates, risk appetite statements, and escalation arrangements.

• Assess delegated authorities for treasury dealing, funding, investments, hedging, settlements, approvals, limit management, and exception handling.

• Examine segregation of duties between front office, middle office, back office, accounting, risk management, and independent control functions.

• Audit the alignment between treasury strategy, risk appetite, operational controls, financial objectives, and documented treasury policies.

Module 3: Treasury Risk Identification and Exposure Management

• Examine methods used to identify foreign exchange, interest rate, liquidity, funding, investment, counterparty, and market risks within treasury operations.

• Assess how treasury exposures are measured, aggregated, monitored, reported, and compared with approved risk limits and strategic objectives.

• Evaluate exposure forecasting, risk measurement methodologies, sensitivity analysis, scenario analysis, and management reporting processes.

• Identify control weaknesses that may cause treasury exposures to be misstated, omitted, duplicated, incorrectly classified, or inadequately monitored.

Module 4: Hedge Strategy, Designation and Documentation

• Examine the relationship between documented risk management strategies, hedged items, hedging instruments, designated risks, and hedge accounting relationships.

• Evaluate hedge designation documentation for completeness, consistency, authorization, supporting evidence, and alignment with treasury risk management objectives.

• Assess controls over changes to hedge relationships, redesignations, discontinuations, amendments, and circumstances requiring reassessment.

• Identify common documentation deficiencies that can undermine accounting treatment, audit evidence, control effectiveness, and financial statement reliability.

Module 5: Hedge Effectiveness Assessment and Testing

• Examine methodologies used to assess hedge effectiveness and determine whether testing appropriately reflects the underlying economic relationship.

• Evaluate data, assumptions, measurement techniques, testing frequency, thresholds, exceptions, and management review supporting effectiveness assessments.

• Assess controls over effectiveness calculations, model changes, manual adjustments, validation procedures, and independent review processes.

• Identify unusual effectiveness results, persistent ineffectiveness, inconsistent methodologies, and other indicators requiring enhanced audit investigation.

Module 6: Hedge Accounting Recognition and Financial Reporting

• Examine accounting processes for cash flow hedges, fair value hedges, and other qualifying hedging relationships within applicable financial reporting frameworks.

• Evaluate recognition, measurement, presentation, reclassification, and disclosure of hedge-related amounts in financial statements and supporting schedules.

• Audit accounting entries associated with effective and ineffective portions, accumulated balances, adjustments, discontinuations, and hedge-related movements.

• Assess reconciliations between treasury systems, valuation systems, subledgers, general ledger accounts, and financial reporting disclosures.

Module 7: Foreign Exchange Hedging and Treasury Controls

• Audit foreign exchange hedging activities involving forwards, swaps, options, and other instruments used to manage currency exposures.

• Evaluate controls over currency exposure identification, hedge execution, pricing, confirmation, settlement, accounting, and performance monitoring.

• Examine foreign exchange valuation processes, market data sources, rate controls, independent verification, and foreign currency translation impacts.

• Identify risks arising from unauthorized trades, excessive exposures, mismatched hedges, incorrect currencies, settlement errors, and inaccurate accounting.

Module 8: Interest Rate Hedging and Funding Controls

• Examine interest rate swaps, options, caps, floors, and other instruments used to manage borrowing costs and interest rate exposures.

• Assess controls over debt portfolios, refinancing activities, interest rate exposure measurement, hedge designation, valuation, and accounting.

• Evaluate interest rate curves, market data, model assumptions, valuation controls, and independent review procedures supporting treasury reporting.

• Audit the connection between funding strategies, debt agreements, interest rate risk management, hedge relationships, and financial reporting outcomes.

Module 9: Treasury Valuation, Market Data and Model Controls

• Evaluate valuation methodologies for derivatives and other treasury instruments, including pricing models, observable inputs, assumptions, and valuation adjustments.

• Assess controls over market data sourcing, data validation, price verification, valuation hierarchies, and independent valuation processes.

• Examine model governance, model validation, change controls, parameter management, and approval processes affecting treasury valuations.

• Identify valuation uncertainty, stale pricing, inappropriate assumptions, model limitations, and manual intervention risks requiring enhanced audit procedures.

Module 10: Liquidity, Funding and Cash Treasury Controls

• Assess controls over cash positioning, liquidity forecasting, funding requirements, bank relationships, short-term investments, and liquidity risk monitoring.

• Examine treasury processes for managing liquidity buffers, cash concentration, funding maturity profiles, and contingency liquidity requirements.

• Audit controls over bank accounts, cash transfers, payment approvals, funding transactions, reconciliations, and liquidity reporting.

• Evaluate whether liquidity information is complete, accurate, timely, and appropriately integrated into treasury risk management and financial reporting.

Module 11: Counterparty Risk, Collateral and Treasury Settlement

• Examine counterparty onboarding, credit assessments, exposure limits, collateral arrangements, netting agreements, and ongoing counterparty monitoring.

• Evaluate controls over derivative confirmations, settlement instructions, collateral calls, margin movements, and disputes with financial counterparties.

• Assess reconciliation of counterparty positions, collateral balances, settlement records, treasury systems, and accounting information.

• Identify risks associated with settlement failures, incorrect counterparties, unauthorized instructions, collateral disputes, and inaccurate exposure calculations.

Module 12: Treasury Systems, Data Governance and Automated Controls

• Examine treasury management systems, trading platforms, accounting interfaces, market data feeds, automated workflows, and system-generated control activities.

• Evaluate access management, user privileges, segregation of duties, interface controls, data integrity, system changes, and automated calculation controls.

• Assess data lineage between treasury transactions, valuation engines, hedge effectiveness calculations, accounting systems, and financial reporting.

• Examine cybersecurity, API integration, cloud services, automation, artificial intelligence, and technology resilience risks affecting treasury assurance.

Module 13: Reconciliations, Accounting Entries and Control Exceptions

• Audit reconciliations between treasury platforms, bank records, derivative confirmations, valuation systems, subledgers, general ledger accounts, and financial statements.

• Examine aged reconciliation breaks, unexplained differences, suspense accounts, manual journals, late adjustments, and unresolved treasury exceptions.

• Assess controls over journal preparation, authorization, supporting documentation, review, posting, and correction of treasury-related accounting entries.

• Identify patterns of recurring breaks, management overrides, delayed remediation, or unusual adjustments that may indicate broader control weaknesses.

Module 14: Treasury Fraud, Manipulation and Conduct Risk

• Identify fraud risks involving unauthorized trading, fictitious transactions, concealed losses, valuation manipulation, limit circumvention, and inappropriate accounting adjustments.

• Examine conduct risks involving conflicts of interest, inappropriate trading practices, misuse of confidential information, incentive pressures, and management override.

• Apply data analytics to identify unusual transaction patterns, out-of-market pricing, abnormal valuations, unusual cancellations, and suspicious journal entries.

• Evaluate investigation, escalation, evidence preservation, disciplinary, and remediation processes for suspected treasury fraud or control breaches.

Module 15: Treasury Analytics, Stress Testing and Continuous Assurance

• Apply analytical procedures to treasury populations to identify unusual exposures, limit breaches, ineffective hedges, valuation anomalies, and reconciliation exceptions.

• Evaluate stress testing, scenario analysis, sensitivity analysis, liquidity stress indicators, and management responses to adverse market conditions.

• Design continuous monitoring procedures using dashboards, automated alerts, exception reporting, and risk-based analytical routines.

• Assess emerging risks from market volatility, digital treasury transformation, artificial intelligence, automation, geopolitical uncertainty, and evolving financial instruments.

Module 16: Integrated Hedge Accounting and Treasury Controls Audit Case Study

• Conduct an end-to-end audit of a treasury environment involving hedge designation, derivatives, valuation, effectiveness testing, accounting, settlements, and financial reporting.

• Analyze governance documents, transaction populations, hedge documentation, valuation outputs, reconciliations, control evidence, and management explanations.

• Develop audit findings that connect observed exceptions to control deficiencies, root causes, financial implications, risk exposure, and corrective actions.

• Prepare an integrated assurance report and management presentation demonstrating professional skepticism, evidence evaluation, prioritization, and practical remediation.

Training Approach

This course will be delivered by our skilled trainers who have vast knowledge and experience as expert professionals in the fields. The course is taught in English and through a mix of theory, practical activities, group discussion and case studies. Course manuals and additional training materials will be provided to the participants upon completion of the training.

Tailor-Made Course

This course can also be tailor-made to meet organization requirement. For further inquiries, please contact us on: Email: training@upskilldevelopment.com Tel: +254 721 331 808

Training Venue 

The training will be held at our Upskill Training Centre. We also offer training for a group (at a discount of 10% to 50%) at requested location all over the world. The Onsite course fee covers the course tuition, training materials, two break refreshments, buffet lunch, airport transfers, Upskill gift package, and guided tour.

Visa application, travel expenses, dinners, accommodation, insurance, and other personal expenses are catered by the participant

Certification

Participants will be issued with Upskill certificate upon completion of this course.

Airport Pickup and Accommodation

Airport pickup and accommodation is arranged upon request. For booking contact our Training Coordinator through Email: training@upskilldevelopment.com, +254 721 331 808

Terms of Payment:

Unless otherwise agreed between the two parties’ payment of the course fee should be done 3 working days before commencement of the training so as to enable us to prepare better.