'Widespread Endorsement' Of Key Internal Audit Principles by Banks
A survey by the Basel Committee’s Accounting Task Force has reported widespread endorsement of the key internal audit principles identified by the Committee as reflecting best practice within the banking industry. The survey found ‘broad recognition’ of the importance of independent and competently staffed internal audit functions. Responses further indicated that boards of directors and audit committees are devoting time and effort to ensuring that their banks maintain ‘appropriate internal controls and risk management protocols’ and are complying with laws and regulations. Almost all banks surveyed either already have an audit charter in place or are currently drafting one. Prof Arnold Schilder, a member of the Basel Committee, Chairman of its Accounting Task Force and Executive Director at the Netherlands Bank, said: ‘Current events have highlighted the importance of these endeavours in promoting a culture of robust internal controls and strong internal audit functions in banks as cornerstones of sound corporate governance. High-quality audit is important to ensure public confidence in the integrity of published financial statements.’ The Basel Committee surveyed the internal audit issues in banks in 13 countries utilising the framework of the Committee’s best practice paper issued in August 2001.