Internal auditors of banks are critical stakeholders to realising sets goals and achieving sustainable growth, the Managing Director/Chief Executive Officer, Coronation Merchant Bank Limited, Abubakar Jimoh, has said.
He said companies with a focus on excellence always ensured that the internal audit department maintained global standards in process and resource considerations.
Jimoh, who spoke on the theme, ‘Internal audit: Defence, advisory and consulting’, made this known at the 37th Quarterly Meeting of the Association of Chief Audit Executives of Banks in Nigeria, held in Lagos.
Quoting the Institute of Internal Auditors, the CEO said internal auditing as an independent, objective assurance and consulting activity, was meant to add value and improve an organisation’s operations.
According to him, internal auditing brings systematic, disciplined approach to evaluation and improvement in the effectiveness of risk management, control, and governance processes.
Jimoh, who was represented by the bank’s Executive Director, Enterprise, Mrs. Onome Komolafe, said, “This definition of internal audit provides comprehensive guidelines for the framework of internal audit and should be a critical reference point in formulating the complete internal audit approach.
“The internal audit activity must be free from interference by any influence that hinders the progress of work, including matters of audit selection, scope, procedures, frequency, timing, or report content to permit maintenance of a necessary independent and objective mental attitude.”
Jimoh said internal auditors must exhibit the highest level of professional objectivity in gathering, evaluating, and communicating information about the activity or process being examined.
Internal auditors, according to him, must make a balanced assessment of all the relevant circumstances and not be unduly influenced by their own interests or by others in forming judgments
Also speaking, ACAEBIN Chairman, Abiodun Aderoju, praised Coronation Merchant Bank, which hosted the event for a job well done.
According to him, the ACAEBIN formerly known as Committee of Chief Inspectors of Banks and Discount Houses in Nigeria, has been in existence for over 20 years and has been promoting interaction among practitioners.
“It also seeks to promote competence, ethical standard and professional behavior amongst member organisations, while also building a common front in the fight against fraud in the industry,” he said.
Internal auditors, Jimoh added, should have no direct operational responsibility or authority over any of the activities audited.
Accordingly, they are not to implement internal controls, develop procedures, install systems, prepare records, or engage in any other activity that may impair their judgment.
He explained that the first line of defense in the governance of risk framework was the front-line employees who must understand their roles and responsibilities with regard to processing transactions.
These employees, he added, must follow a systematic risk process and apply internal controls and other risk responses to treat the risks associated with those transactions.
“The second line of defense is the enterprise’s Compliance and Risk functions that provide independent oversight of the risk management activities of the first line of defense. This line of defense monitors and facilitates the implementation of effective risk management practices by operational management and assists the risk owners in reporting adequate risk related information up and down the organisation,” he stated.