Avoiding Fraud and Irregularities in Financial Institutions: A Control‐oriented Approach

Abstract

While internal auditors in financial institutions have only nominal direct legal responsibility, there is implied indirect responsibility. As a defence to such potential, an audit department could substantiate its “due dilligence” efforts by identifying basic elements of internal controls and performing audits on a regular basis in areas with high risk exposures. Presents a list of suggested audit frequencies and necessary internal controls for some of the most vulnerable areas in the banking industry. These suggestions should be helpful to audit departments in planning and scheduling their activities, as well as helping the institutions in cutting external audit fees that may otherwise be required in a weak internal control environment.

Citation

Chang, S.Y. and Morris, R.E. (1993), "Avoiding Fraud and Irregularities in Financial Institutions: A Control‐oriented Approach", Managerial Auditing Journal, Vol. 8 No. 7. https://doi.org/10.1108/02686909310046844