Internal Audit of Banking System and United Framework of Risk Management

Abstract

Internal auditors play an important role in evaluating the effectiveness of control systems. As an independent reporter to the top management, internal audit is able to assess the internal control systems implemented by the organization and contribute an ongoing effectiveness. As such, internal audit often plays a significant monitoring role. In order to preserve its independence of judgment Internal Audit should not take any direct responsibility in designing, establishing, or maintaining the controls it is supposed to evaluate. It may only advise on potential improvement to be made. To be more effective internal audit of Armenian Banking system should move towards from the Traditional audit risk approaches to the Risk-Based Audit approach. The above mentioned model will provide one step to prepare Risk Based Audit Plan, to assess the most risky entities of the bank.