Financial Derivatives: An Introductory Course for Internal Auditors

Financial derivatives play an increasingly important role in modern financial management, risk mitigation, and treasury operations. While derivatives can be powerful tools for managing exposures such as interest rate, currency, and commodity risks, they also introduce complexity, valuation challenges, and significant governance considerations. For internal auditors, understanding how derivatives work—and how they can impact financial statements, controls, and risk profiles—is essential.

To address this need, BOOST has designed the Financial Derivatives: An Introductory Course for Internal Auditors to provide a clear, structured, and practical foundation for audit professionals who are not derivatives specialists. This program demystifies derivatives by explaining their purpose, structure, and usage from an internal audit perspective rather than a trading or investment standpoint.

The course focuses on helping internal auditors understand why organizations use derivatives, how these instruments are structured, how risks arise, and where control and reporting failures typically occur. Participants gain insight into key derivative types, basic valuation concepts, accounting and disclosure considerations, and common risk management practices—without requiring advanced mathematical or financial engineering knowledge.

Through practical examples, simplified case discussions, and audit-focused scenarios, participants develop the confidence to assess derivative-related risks, review governance and controls, and contribute meaningfully to audit engagements involving treasury and financial risk management activities.

• Understand the purpose and role of financial derivatives in organizations
• Identify the main types of financial derivatives and their basic characteristics
• Recognize why organizations use derivatives for hedging and risk management
• Understand key risks associated with derivative instruments
• Gain awareness of basic valuation and pricing concepts
• Understand high-level accounting and disclosure considerations for derivatives
• Identify common control weaknesses and audit risks related to derivatives
• Apply an internal audit mindset when reviewing derivative activities