• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Internal Auditors in Banking

Extracts from this document...


Internal Auditors in Banking Matthew Cassar Introduction Auditing is the inspection and verification of the accuracy of financial records and statements. Banks conduct internal audits of accounting records and procedures. Its task is to examine the risks that the bank faces, to review the adequacy of the controls in place to protect it from those risks, and to verify that the controls are working as intended. This report aspires to outline the purpose, roles, and standards involved in the internal auditing of banks. The importance of internal auditing Banks take on the role of securing and investing its customer's funds; if they gain a reputation for being untrustworthy then customers will move onto another competing bank. Also, banks are to comply with a mandatory external audit which is sent in to confirm the findings of the internal audit and to make sure everything is correct. The external auditors present an audit statement that is made public in the bank's annual report. Thus, it is better off for the bank to het their books straight the first time rather than being caught in the external audit. ...read more.


As previously stated, controls are extremely important for an auditor to regulate properly. When examining the sufficiency of the controls, the auditor would be undertaking a systems audit. When testing the controls themselves, the auditor would be doing a compliance audit. If the auditor needed to verify the presence of physical financial assets, it would be a custody audit. Computer Audits Computer audits ensure that the bank's computers are properly controlled. An auditor must ask himself these questions: Are the physical controls over a computer site adequate? Are backups of data taken regularly? Are passwords changed frequently? When doing this work the auditor would be undertaking an operational audit. The computer applications themselves and the controls over them are usually the responsibility of the financial auditors since the applications form part of the business process. It is also important for auditors to become involved with any new computer system at the design stage, to ensure that proper controls are built in. This is a development audit. Value-for-money Audits These audits give management an opinion about the value for money that the bank gets from a particular process. ...read more.


These standards are based on what they have learned from the more experienced external audits. Conclusion Internal audits in general are extremely important to a company's success and are vital in ensuring good consumer confidence. But when internal audits take place in banks the stakes are that much higher. Workers and businesses savings are being trusted to banks. If that line of trust were to be broken the bank would suffer great losses. This is why internal auditing in banking is so important and thus the focus of this report. 1,055 words Sources (MLA Citation) 1. "Audit." Wikipedia. 1 April. 2007 <http://en.wikipedia.org/wiki/Internal_audit> 2. "High performance auditing in banking." Business and Finance. February 2003. Find Articles.com. 1 April. 2007 < http://www.findarticles.com/p/articles/mi_m4153/is_n1_v53/ai_18202725> 3. "Internal audit in banks and the supervisor's relationship with auditors." Basel Committee on Banking Supervision. August 2001. Bank for International Settlements. 1 April. 2007 <http://www.bis.org/publ/bcbs84.htm> 4. "Internal Audit FAQ." Internal Audit. University of Birmingham. 1 April. 2007 <http://www.internalaudit.bham.ac.uk/faqs.htm> ** Thank you Lewis M.L. Cassar CA, MBA for your part in explaining key concepts related to the topic of this research assignment. Note: Lewis is an expert in the field of accounting as well as banking with 30 years of work experience. Presently he controls the Toronto Internal Audit for States Street Bank and Trust. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Accounting & Finance section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Accounting & Finance essays

  1. Accounting Concepts and Conventions

    There is no single approved way for calculating depreciation. The method chosen for depreciating assets should be used constantly. However, the method used to depreciate fixed assets may be changes, but only if the new method gives a fairer presentation of profit (losses) and of the financial position: Straight-Line Method: This is the simplest and easiest approach.

  2. This report has been produced as evidence for Unit 9 - 'Financial Services' - ...

    15,258 Expenditure 200 200 200 200 200 200 Mortgage 400 400 400 400 400 400 Endowment 120 120 120 120 120 120 Life Insurance (Paul) 9.20 9.20 9.20 9.20 9.20 9.20 Car insurance(Anna) 30.00 30.00 30.00 30.00 30.00 30.00 Car insurance(Paul)

  1. Free essay

    planning personal finances

    His expenditure will include tution fees, halls of residence, books, leisure, clothes, travel to and from university, presents for family and he hopes to have some money to go on holiday. He is also aware that he needs to keep some sort of savings (contingency fund)

  2. Complete Report on Askari Commercial Bank

    supplier / vendor, which appear or may appear to compromise commercial or business relationship. * Employees must remain alert and vigilant with respect to frauds, thefts or illegal activities committed within the Bank premises. Inspiring Relationships Inspiring 600,000 relationships: Knowing our customers and their needs is the key to our business success.

  1. The Purpose of Keeping Accurate Accounts

    The firm can change its depreciation policy and method of calculation, but only for a good reason. The purpose of applying depreciation is therefore to adjust annual profits, to avid charging the full amount of depreciation in a single year, which would distort the year's profits.


    This relationship can also vary over time. For example, Spain, for a long time ha d a strong link between financial reporting and taxation. But after 1989 the link has become weak and they are moving to be independent." (Alexander et al, 2004, pg 26). " In Korea depreciation generally follows tax rules.

  1. Identifying and describing the main financial service needs for a student starting at university

    you're overdrawn Halifax 3.04% AER/ 3% gross 8.9% EAR Royal Bank of Scotland 0.1% AER/gross 17.9% EAR Barclays 0.1% AER/gross 15.6% EAR Nat West 0.1% AER/gross 17.8% EAR HSBC 0.1% AER/gross 14.8% EAR Savings Account It is unlikely that a student at university have a great deal of money left

  2. Unit 5 Introduction to Accounting

    While shares are often used to refer to the stock of a corporation, shares can also represent ownership of other classes of financial assets, such as mutual funds. Ordinary shares Ordinary shares are also known as equity shares and they are the most common form of share.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work