Challenges of internal audit in the financial control system of banks

Abstract

The issue of determining the quality of internal audit in the financial control system of banks is extremely important in order to maintain financial stability. Internal audit was not effective in many cases, mainly because of the combination of three factors: gradual audits, lack of understanding of the bank’s activity and inadequate followup of problems. The fragmented audit resulted from the structuring of the internal audit programs as a series of separate commitments on some activities within the same department or within the bank. Therefore, the introduction of information technology systems and technologies is important for improving the organizational methodology and audit at the current stage of its development. It is also noted that the quality of audit controls depends directly on the training of staff and the improvement of their skills. The research methodology is based on secondary data, including the observation method, the synthetic method, the comparative analysis, the induction and the deduction. The purpose of this article is to explore the quality and independence of internal control and audit in times of crisis and its resolution by improving the financial control system of banks. Following the study, the challenges of internal audit within the banks’ financial control system were identified, and solutions were proposed. At the same time, it was concluded that increasing the importance of financial control and audit have a major impact on the stability of banks. DOI: https://doi.org/10.53486/9789975155663.43; CZU: 336.71.078.3:657.6; JEL: M40, G01, G21, G32.