The impact of internal audit on operational risk management in the light of the performance standard for the practice of internal auditing

A field study on a number of private banks in the city of Erbil

  • Ramyar Rzgar Ahmed Department of Accounting and Finance, College of Administration and Economics, Lebanese French University - Erbil, Kurdistan Region - Iraq.
Keywords: Internal audit, Operational risk management, International auditing standards, Performance standards, Risk Management, Control, Governance

Abstract

This study aimed to identify the impact of internal auditing on operational risk management in accordance with international standards for the professional practice of internal auditing, including performance standards in private banks in the city of Erbil. It was distributed to (internal auditors, administrators, and managers), where the total number of distributed forms reached (120) forms, and (114) questionnaires valid for analysis were retrieved, which represents a return rate of approximately (95%).The researcher used the descriptive approach and the analytical approach in conducting this research, and where the research community was the auditing and management departments in some private banks in the city of Erbil (namely: Cihan Bank, Kurdistan Bank, and the Regional Commercial Bank RT), and the researcher used the statistical program (SPSS).), and appropriate statistical treatments in the analysis in this regard.

Among the most important results of the study were:

  1. There is a positive statistical significance that shows the first hypothesis, which is (there is a significant relationship between the dimensions of internal auditing and risk management and between performance standards individually and collectively).
  •  
  1. There is a positive statistical significance that shows the second hypothesis, which is (there is a positive significant effect between the dimensions of internal auditing and risk management, and between performance standards individually and collectively, in other words,"what is the extent of the contribution of internal audit and operational risk management to the changes taking place in the dimensions of performance standards?”).
  2. There is a positive statistical significance that shows the third hypothesis, which is (weakness of strategic procedures, policies followed, the extent of awareness of the internal auditor) on performance standards.

In light of the results, and the conclusions of this study, some proposals were put forward, the most important of which are:

  1. Giving more attention and care to the internal audit function in banking institutions.
  2. The necessity of creating a special department for risk management, so that it is flexible and effective in managing risks in banks.
  3. The necessity of the independence of the internal audit departments, and their coordination with the departments of risk management within banks, and attention to raising the qualifications of their employees.

The banking institutions support the elements of the independence of the internal auditor so that he can carry out his duties to the fullest extent, especially with regard to risk management in accordance with special international standards.

Author Biography

Ramyar Rzgar Ahmed, Department of Accounting and Finance, College of Administration and Economics, Lebanese French University - Erbil, Kurdistan Region - Iraq.

Department of Accounting and Finance, College of Administration and Economics, Lebanese French University - Erbil, Kurdistan Region - Iraq.

References

المصادر، و المراجع العربية
الكتب:
1. الراوي، خالد وهيب (إدارة المخاطر المالية) دار ميسرة للنشر والتوزيع، ط1، عمان، الاردن، 2011.
2. الخطيب، سمير (قياس وإدارة المخاطر في البنوك) منشاة المعارف، الإسكندرية، القاهرة، المصر، 2005.
3. التميمي، هادي (مدخل الى التدقيق من الناحية النظرية والعلمية) دار وائل للنشر، ط1، عمان، الاردن، 2006.
4. صبح، داوود يوسف (دليل التدقيق الداخلي وفق المعايير الدولية) اتحاد المصارف العربية، ط2، بيروت، لبنان، 2010.
5. الواردات، خلف عبدالله (التدقيق الداخلي بين نظرية والتطبيق) مؤسسة الوراق للنشر والتوزيع، ط 1، عمان، الاردن، 2006.
6. عباس، علي (الرقابة الادارية في منظمات الاعمال) اثراء للنشر والتوزيع، ط2، عمان الاردن، 2012.
7. المطارنة، غسان فلاح (تدقيق الحسابات المعاصر – الناحية النظرية) دار الميسرة للنشر والتوزيع، ط1، عمان، الاردن، 2006.
8. حشاد، نبيل (دليلك إلى إدارة المخاطر المصرفية) دار النشر اتحاد المصارف العربية، 2005.
الاطاريح و الرسائل الجامعية
1. عبدالمغني، فضل علي (مدي تطبيق معايير التدقيق الداخلي المتعارف عليها في بنوك التجارية اليمنية) رسالة ماجستير، جامعة يرموك، عمان، 2003.
2. اسماعيل، العشي (واقع التدقيق الداخلي في المؤسسة الاقتصادية الجزائرية على ضوء المعايير التدقيق الداخلي) رسالة ماجستير في علوم اقتصادية والتسيير وعلوم تجارية، جامعة قاصدي مرباح، ورقلة، الجزائر، 2018.
3. عبدالمغني، فضل علي (مدى تطبيق معايير التدقيق الداخلي المتعارف عليها في البنوك التجارية اليمنية) رسالة ماجستير، جامعة يرموك، عمان، 2003.
المواقع الالكترونية:
1. side – AII @ theiia.org
English Refrences:
1. Institute of Internal Auditors – IIA ,(international Standards for the Professional Practice Internal Auditing) ,2002.
2. Benli , Uahitferhan. Celayir , Duygu (Risk – Based Internal Audit and Risk Assignment Process) European Journal of Accounting and Financial research, Vol.2 , No 7 , pp (1-16) ,Sep.2014.

3. Carter , Terrance (Legal risk management checklist for charities) www. Carters. ca.edu ,2007.
4. Panjer , Harry H (Operational risk Modelling Analytics) a john wily & sons inc , publication , 2009.
5. -Allen & Boudoukh & Saunders ,Linda,Jacob,Anthony ,
6. (Understanding Market , Credit , and Operational Risk the Value at Risk Approach), Elsevier Inc ,U.S.A.,2009.
7. . Tinca,Andrei,(The operational risk in the outlook of the Basel 2 accord implementation)Webster university ,2007
8. .Care(Management Operational Risk) www.care.org.com.2003
9. Basel Committee on Banking Supervision , (Overview of The New Basel Capital Accord) 31,july , 2003.
10. Internal Audit in banks and Supervision Relationship with Auditors , Aug 2001 , pp9
11. Basel committee on(Banking supervision, Sound practices for management and supervision of Operational) www.bis.org.com Feb 2003
12. Basel committee on Banking supervision, Bank for international
13. settlements a principles for the home – host recognition of AMA Operational Risk capital , www.bis.org.com Jan 2004.
Published
2021-12-29
How to Cite
Ahmed, R. (2021). The impact of internal audit on operational risk management in the light of the performance standard for the practice of internal auditing: A field study on a number of private banks in the city of Erbil. Humanities Journal of University of Zakho, 9(4), 952-975. https://doi.org/10.26436/hjuoz.2021.9.4.765
Section
Humanities Journal of University of Zakho