In the bank, a periodic internal audit is required to keep matters transparent and maintain internal control. With a good internal audit, it gets easier for the administration to perform its responsibilities and carry out important operational activities. It helps evaluate the effectiveness of internal control systems besides reviewing how adequate the risk management procedures are.
If you are a bank owner, who wants their bank practice to be free from malpractices and the internal control to be in check, you need to hire services of professional auditors. Banks, at all levels, in the UAE, have been relying on the professionals for these services. If your bank is running there, you can get in touch with one of the top audit firms in Dubai and save your bank from any unwarranted risks.
This article aims to introduce you to the key principles that are an essential part of internal audits in banks.
Four key principles of functions that internal auditors perform in banks
Every system works on the basis of some principles. When it comes to an internal audit, there needs to be a complete framework upon which supports the whole process of audit and enables it to help an organization gain benefit from it. The principles are as follows:
1. Independent assurance to the board of directors
An internal audit can only be effective if it is independent and assures the board of directors and senior-level management that the process is completely unbiased. An internal audit involves aspects of the bank’s internal control, risk management, and governance systems. If all of these aspects are dealt with without any biases, they will ease the pressure of responsibilities that higher echelons in the bank have on them.
2. Presence of An internal audit charter
Internal audit cannot be effective without an internal audit charter in the bank. This charter defines the purpose and the authority of the audit function. It helps in making authoritative matters transparent. Everyone involved in the due process knows the end goal of the audit. Secondly, the auditor knows whom he/she reports to.
3. All activities in the bank should fall under the audit
Banks have various activities occurring at the same time in different departments. Some activities are even outsourced. All of these activities must fall under the umbrella of an internal audit. As a bank owner, you must ensure that the practices related to all kinds of activities in the bank are put under scrutiny and the auditor assesses them.
4. BoD is the ultimate authority
Internal auditors are an external resource. They are completely neutral. They do not have any inclinations within your organization. But still, the final authority must rest with the internal resource. Ensure that when the audit analysis is complete and the auditor prepares the report, the authority which checks the report is a board member belonging to your bank.
Is your bank in need of an internal auditor?
Internal audits feel like scrutiny but they are in the greater benefit of your organization. If your bank is in the UAE, you can follow the suit of many other banks which are adopting healthier and transparent practices already. With the help of professionals from Top audit firms in Dubai, you can also ensure that your bank is safe from frauds and malpractices.
Just make sure that the framework for internal audit in your organization is supportive of the process!