We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Risk Based Internal Audit - A Suggested Scoring Model.
- Authors
Kaveri, V. S.
- Abstract
Traditional transactions based internal audit in banks focuses on accuracy and reliability of accounting records, financial reports, timeliness of control reports, adherence to legal and regulatory requirements, etc. But, with the introduction of Risk Based Internal Audit (RBIA) in commercial banks by Reserve Bank of India (RBI) in 2002, the traditional internal audit is expected to be phased out. RBIA aims at looking into systems and practices in banks in assessing, managing and controlling risks. This is also expected to allocate supervisory resources and pay supervisory attention in accordance with the risk profile of each bank. Initially, Urban Cooperative Banks (UCBs) and Non-Bank Finance Companies (NBFCs) were not considered for RBIA due to their small size. It is disheartening to note that the recent failure of Punjab and Maharashtra Cooperative (PMC) Bank and IL&FS has shaken the confidence in UCBs and NBFCs respectively. At the same point commercial banks also witness increasing number of irregularities/frauds. Therefore, in January 2021, RBI has asked commercial banks to strengthen RBIA by addressing issues relating to their organizational preparedness. At the same time, UCBs and NBFCs have also been instructed to initiate RBIA immediately. Since the core component of RBIA is risk assessment and risk mitigation, the article attempts to suggest a scoring model, besides discussing concept, process and RBI guidelines for the benefit of officers in commercial banks, UCBs and NBFCs.
- Subjects
PUNJAB; MAHARASHTRA (India); INTERNAL auditing; RESERVE Bank of India; COOPERATIVE banking industry; BANKING industry; BANK reserves; FINANCIAL statements; LEGAL education; SCORING rubrics; CAPITAL requirements
- Publication
Vinimaya, 2021, Vol 42, Issue 2, p30
- ISSN
0970-8456
- Publication type
Article