Course Introduction
The IFRS 9 Financial Instruments Audit Training Course provides auditors, accountants, finance professionals, and assurance practitioners with a practical framework for auditing financial instruments under IFRS 9. The course focuses on the accounting areas that create significant audit risks, including classification and measurement, impairment, expected credit losses, derecognition, modifications, hedge accounting, valuation, and related disclosures.
The program examines how auditors can assess management’s application of IFRS 9 principles across loans, receivables, debt investments, equity instruments, deposits, derivatives, and other financial assets and liabilities. Participants will develop an understanding of how contractual cash-flow characteristics, business models, credit risk, market conditions, valuation inputs, and management judgments affect financial instrument accounting and the design of appropriate audit procedures.
A major focus is placed on auditing expected credit loss models and related estimates. Participants will explore the assessment of probability of default, loss given default, exposure at default, forward-looking information, probability-weighted scenarios, staging, significant increases in credit risk, default definitions, and management overlays. The course emphasizes how auditors can challenge assumptions, test model inputs, validate calculations, evaluate data quality, and assess the reasonableness of impairment estimates.
The course also addresses classification and measurement decisions, including amortized cost, fair value through other comprehensive income, and fair value through profit or loss. Participants will examine effective interest calculations, contractual cash-flow assessments, fair value measurements, reclassifications, modifications, derecognition, and accounting for financial liabilities, with particular attention to audit assertions and evidence requirements.
Hedge accounting and derivative instruments receive detailed treatment because of their complexity and reliance on valuation models, documentation, effectiveness assessments, market data, and management judgments. Participants will learn how to audit hedge relationships, designation documentation, effectiveness requirements, derivative valuations, cash flow hedges, fair value hedges, and related accounting entries and disclosures.
Through practical exercises and case studies, participants will develop audit procedures for financial instruments and expected credit losses, including data analytics, model validation, substantive testing, control assessment, valuation testing, confirmation procedures, recalculation, sensitivity analysis, and disclosure review. The course also addresses technology-enabled credit systems, automated impairment models, data governance, cybersecurity, AI-supported modeling, and the need for professional skepticism when evaluating complex financial instrument estimates.
Duration
5 days
Who Should Attend
-
External auditors auditing financial instruments and IFRS 9 financial statement areas.
-
Internal auditors reviewing financial instrument accounting, impairment, and risk controls.
-
Audit managers and supervisors responsible for complex financial reporting audits.
-
Accountants responsible for IFRS 9 accounting and financial instrument reporting.
-
Finance managers overseeing financial instruments, impairment calculations, and disclosures.
-
Banking and financial services auditors involved in credit and impairment audits.
-
Credit risk professionals working with expected credit loss models and credit data.
-
Risk managers responsible for financial instrument and credit risk information.
-
Financial reporting specialists dealing with IFRS 9 classification, measurement, and disclosures.
-
Valuation professionals supporting financial instrument fair value assessments.
-
Forensic and financial investigators examining unusual financial instrument transactions.
-
Internal control specialists evaluating controls over financial instruments and impairment models.
-
Audit data analysts supporting financial instrument transaction and credit-risk analytics.
-
Treasury professionals responsible for derivatives, hedging, investments, and financial liabilities.
-
Professionals preparing for more complex IFRS 9 audit and assurance assignments.
Course Objectives
-
Develop practical expertise in auditing financial instruments under IFRS 9, including classification, measurement, impairment, derecognition, and hedge accounting.
-
Understand how business models and contractual cash-flow characteristics affect financial asset classification and the resulting audit procedures.
-
Evaluate amortized cost, fair value through other comprehensive income, and fair value through profit or loss measurements and related accounting records.
-
Audit expected credit loss calculations by assessing staging, credit-risk changes, probability of default, loss assumptions, exposure data, and forward-looking information.
-
Assess the completeness, accuracy, relevance, and reliability of data used in financial instrument accounting, impairment models, valuations, and financial reporting.
-
Apply substantive and analytical audit procedures to loans, receivables, debt securities, investments, derivatives, deposits, and other financial instrument populations.
-
Evaluate management judgments, assumptions, model methodologies, overlays, forecasts, scenarios, and sensitivity analyses used in IFRS 9 impairment estimates.
-
Audit derivative instruments and hedge accounting relationships, including valuation, designation, documentation, effectiveness assessment, and accounting entries.
-
Evaluate financial instrument controls, model governance, data interfaces, automated calculations, valuation processes, and technology-related risks affecting audit evidence.
-
Prepare high-quality audit working papers, findings, recommendations, and financial statement disclosure conclusions for complex IFRS 9 audit areas.
Comprehensive Course Outline
Module 1: IFRS 9 Financial Instruments Audit Fundamentals
-
Understanding the scope and major accounting principles of IFRS 9 and their implications for financial statement audits and assurance engagements.
-
Identifying financial instrument categories and the key accounting judgments that create classification, measurement, impairment, valuation, and disclosure risks.
-
Linking IFRS 9 requirements to audit assertions including existence, completeness, rights and obligations, accuracy, valuation, classification, presentation, and disclosure.
-
Developing a risk-based IFRS 9 audit strategy covering significant financial instruments, material balances, complex estimates, models, and management judgments.
Module 2: Classification of Financial Assets and Liabilities
-
Auditing management’s assessment of business models used to manage financial assets and determining whether classifications are consistent with underlying activities and documented strategies.
-
Testing contractual cash-flow characteristics and assessing whether financial instruments meet the relevant conditions for their applicable measurement category.
-
Auditing classification into amortized cost, fair value through other comprehensive income, and fair value through profit or loss.
-
Evaluating financial liability classification, accounting treatment, modifications, and presentation while identifying unusual or complex arrangements requiring additional audit attention.
Module 3: Amortized Cost, Effective Interest, and Measurement
-
Auditing amortized cost calculations for loans, receivables, debt instruments, deposits, and other financial assets measured using effective interest methodologies.
-
Testing effective interest rates, contractual cash flows, fees, premiums, discounts, transaction costs, modifications, and other inputs affecting carrying amounts.
-
Recalculating interest income and expense and reconciling financial instrument subledgers with general ledger balances and financial reporting records.
-
Identifying calculation errors, incorrect assumptions, inappropriate classifications, incomplete records, and reconciliation differences affecting financial instrument balances.
Module 4: Expected Credit Loss and Impairment Auditing
-
Understanding the expected credit loss framework and the audit implications of twelve-month and lifetime expected credit loss measurements.
-
Auditing staging assessments and significant increases in credit risk using borrower information, payment behavior, credit ratings, risk grades, and other relevant evidence.
-
Testing probability of default, loss given default, exposure at default, discounting, forward-looking information, and probability-weighted economic scenarios.
-
Evaluating management overlays, post-model adjustments, scenario weights, expert judgments, and other assumptions used to address model limitations or emerging risks.
Module 5: Data, Models, and ECL Model Validation
-
Assessing the completeness and accuracy of loan, borrower, collateral, repayment, delinquency, credit-risk, and other datasets used in expected credit loss models.
-
Testing data interfaces between core banking, loan administration, risk systems, accounting systems, data warehouses, and financial reporting platforms.
-
Evaluating ECL model methodologies, segmentation, historical loss information, calibration, assumptions, model changes, validation procedures, and governance controls.
-
Applying independent recalculation, back-testing, sensitivity analysis, benchmarking, and other procedures to challenge significant model outputs and estimation uncertainty.
Module 6: Fair Value and Valuation Auditing
-
Auditing fair value measurements for financial instruments using appropriate market information, valuation techniques, observable inputs, and relevant supporting evidence.
-
Evaluating valuation models for derivatives, securities, complex instruments, and instruments without readily observable market prices.
-
Testing market data, yield curves, interest rates, credit spreads, volatility assumptions, discount rates, and other valuation inputs for reliability and consistency.
-
Assessing valuation adjustments, model uncertainty, level of estimation risk, independent price verification, and management judgments affecting reported fair values.
Module 7: Derecognition, Modifications, and Complex Transactions
-
Auditing derecognition of financial assets and liabilities and evaluating whether transactions meet the relevant accounting conditions based on contractual rights and obligations.
-
Examining loan restructurings, refinancing, modifications, renegotiations, settlements, write-offs, and other changes that may affect financial instrument accounting.
-
Testing transfers of financial assets, securitization arrangements, collateral structures, guarantees, and other complex transactions for appropriate accounting treatment.
-
Evaluating unusual transactions and management judgments through contract review, legal documentation, confirmations, transaction tracing, and substantive audit procedures.
Module 8: Derivatives and Hedge Accounting Auditing
-
Auditing derivative recognition and measurement, including forward contracts, swaps, options, and other instruments requiring valuation and specialized audit procedures.
-
Evaluating hedge designation, documentation, hedged items, hedging instruments, risk-management objectives, and the accounting consequences of hedge relationships.
-
Testing fair value hedges, cash flow hedges, effectiveness assessments, valuation movements, and related accounting entries and disclosures.
-
Assessing derivative confirmations, market data, valuation models, counterparty information, collateral arrangements, and control procedures surrounding treasury activities.
Module 9: Financial Instrument Controls, Analytics, and Disclosures
-
Evaluating internal controls over financial instrument origination, classification, valuation, impairment, reconciliation, reporting, review, and disclosure processes.
-
Applying data analytics to identify unusual loans, overdue exposures, unexpected write-offs, unusual valuations, restructuring activity, classification changes, and other exceptions.
-
Auditing financial instrument disclosures for completeness, consistency, classification, risk information, accounting policies, estimation uncertainty, and reconciliation to underlying records.
-
Assessing automated financial instrument systems, model governance, access controls, cybersecurity, data lineage, AI-supported analysis, and technology dependencies affecting audit reliability.
Module 10: IFRS 9 Audit Reporting and Practical Case Studies
-
Developing integrated audit procedures for financial assets, financial liabilities, expected credit losses, fair value measurements, derivatives, and hedge accounting.
-
Evaluating audit evidence and documenting significant judgments, model assumptions, valuation procedures, data testing, analytical results, exceptions, and conclusions.
-
Preparing audit findings and recommendations addressing control deficiencies, data-quality problems, model weaknesses, valuation issues, impairment concerns, and disclosure gaps.
-
Completing practical IFRS 9 case studies involving loan portfolios, investment securities, ECL models, financial instrument valuations, derivatives, reconciliations, and financial statement disclosures.
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.
