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Quant jobs in Internal Audit

Joined
9/20/13
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In recent years, some Tier 1 investment banks have created quant teams as part of their Internal Audit, to act as a "last line of defence" in the model management process. I have come across ads for such positions on various career websites.

What kind of work is normally done in these teams? Is it relatively easy to move from such a team into model validation/methodology, or is it generally regarded as a dead end?
 
As a soon to be former internal auditor, moving to a quant application development role, I must strongly disagree with alain. :cool:

People will not like you, if you have a bad personality, and cannot make a valid argument for you auditing process. If you show your understanding of their job/field/desk/you-name-it, the quant/analysts/traders will respect you. Also, as a junior auditor you will not be the one writing the reports, or having political discussion with the management, so you will not be the person that really annoys the rest of the company. Show respect, and you'll get it back.

To answer your question, most of the quant audit roles I've heard about (I've spoken to RBS, Lloyds, and HSBC in London) are more or less about double checking the model validation process. you should not expect to do much programming. You will, however, learn a lot about models, quantitative methods, etc, which is necessary for you to be able to assess the model implementation, the tests chosen by the validation team, discuss possible model issues/limitation with the quant team, etc.

Of course quant auditor is not the same as quant in an audit team. But I've only heard about the latter from my old boss, who moved to another bank, and claimed that he has quants writing programs for his team. He did not say what programming language, so I think he was overselling his team, and he just had a guy or two, who would write a SAS/VBA/SQL code for data gathering. But who knows. In my job I mostly did VBA (which doesn't count for much), but the last ~15 months I've been reviewing and writing C++ code. I was in a lucky position that I could steer my own projects and decide whether to look at the code, or just at the documentation. AND it was easy to convince my boss that some things we can implement our self to get more 'audit assurance'.

The best part of being a quant auditor is networking. You will meet a lot of people in the company, in many different departments. Which is great, if you're not sure where you'd like to end up later in your career. For example, I didn't know where I want to go and was only remotely aware of the quant department/roles. But it seems like most of the people on QuantNet know what they want, so perhaps quant audit is a waste of time, you may need a couple of years before you make the transition to the proper quant team. On the other hand, since you know from the start you want to move to the quant team, maybe you'll just need a year? If, after this period, you end up getting an interview for the quant team, you will go through the same process and drill-down-questions like everybody else, but at least you will know the people asking you the question (from your audit projects), which makes it much much less stressful. So to summarize, even if you decide to get to a quant role via audit, you still need to know your quant ABC.

I also have seen an external auditor moving to a quant developer role. But he was very experienced and he had an IT background.

I hope my long essay did not put anyone to sleep.;) And rothmann, you are very welcome to ask me some detailed questions, if you like (also via PM).
 
Hi All,

The information on this thread is very helpful. What are the potential growth opportunities if you are in an internal audit model risk role. Will it be considered a concrete experience if you want to shift into a model val role later? Somehow internal audit has a bad reputation when I talk to people. I wonder why?

The role that I am seeing asks for the following qualifications and competencies:

•PhD, MSc or equivalent in Finance, Mathematics, Economics or other relevant quantitative science.
•Intermediate level experience in a related role with experience in business, functional and people management, with proven abilities in taking responsibility for issuing to stakeholders high quality deliverables according to strict timetables.
•Specific subject matter expertise regarding technology application control disciplines and a solid business understanding of Model Risk Management concepts, such as model governance, inventory, documentation, validation and use, especially those associated with the use of models for valuation, risk management, decision support and other purposes across all businesses.
•Experience in model risk assurance activities (internal/external audit, independent validation or regulatory environment) would be an advantage.
•Strong knowledge in risk management, quantitative analysis and software applications.
•Intermediate level experience in a related role with experience in business, functional and people management, with proven abilities in taking responsibility for issuing to stakeholders high quality deliverables according to strict timetables.
•Effective negotiation skills, a proactive and 'no surprises' approach in communicating issues and strength in sustaining independent views. This individual must be an articulate and effective communicator, both orally and in writing, with an energetic, charismatic and approachable style.
•Strong interpersonal skills for interfacing with all levels of internal and external audit and management.

What do you think?
 
dead end, worse than model validation, dont go
@IntoDarkness , not everyone who reads this blog will get a big job at BlackRock or Goldman. There is an oversupply of quants. One place where they are still in demand is in audit. When you say "dead end", what do you mean? No job satisfaction? Low pay? No advancement?

I know a lot of audit quants. They do well and they like their jobs. They advance to mid-level and senior positions. If that means their jobs are "dead end", then I suppose that's something to which many should aspire.
 
@IntoDarkness , not everyone who reads this blog will get a big job at BlackRock or Goldman. There is an oversupply of quants. One place where they are still in demand is in audit. When you say "dead end", what do you mean? No job satisfaction? Low pay? No advancement?

I know a lot of audit quants. They do well and they like their jobs. They advance to mid-level and senior positions. If that means their jobs are "dead end", then I suppose that's something to which many should aspire.

I don't know what it is but seems to me there's lots of hubris on this forum, and possibly in the finance industry (call me captain obvious) but many of these jobs are perfectly acceptable, and make you good money. now comes the question, what's considered good money in this industry...
 
@IntoDarkness , not everyone who reads this blog will get a big job at BlackRock or Goldman. There is an oversupply of quants. One place where they are still in demand is in audit. When you say "dead end", what do you mean? No job satisfaction? Low pay? No advancement?

I know a lot of audit quants. They do well and they like their jobs. They advance to mid-level and senior positions. If that means their jobs are "dead end", then I suppose that's something to which many should aspire.
i get what you are saying. for most ppl there is very little chance to ever be close to front office jobs. the talents ought to venture to some other quant field... i might one day need an audit job...
 
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I will be interviewed for the position Quantitative Model Auditor (Morgan Stanley).

Could somebody give me some insights?
Far as concerning position, they called me and ask would I like to have interview and I said YES. I do not have anything to lose :)

Main reason why I am asking is, I didn't know they need quant positions in Audit teams.
If helps, I am fresh graduate, seeking for entry level positions.


Here is job description:
Morgan Stanley Job Search
 
I will be interviewed for the position Quantitative Model Auditor (Morgan Stanley).

Could somebody give me some insights?
Far as concerning position, they called me and ask would I like to have interview and I said YES. I do not have anything to lose :)

Main reason why I am asking is, I didn't know they need quant positions in Audit teams.
If helps, I am fresh graduate, seeking for entry level positions.


Here is job description:
Morgan Stanley Job Search
PM me. I know those guys really well.
 
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