The role of internal audit in banks: The importance of monitoring processes and risks related to financial affairs Section 2

The role of internal audit in banks, part 2: The importance of monitoring processes and risks related to financial affairs

In the continuation of the first part, we will discuss the role of internal audit in banks, part 2:

**Strengthening the importance of monitoring financial processes and risks:**

To increase the importance of monitoring financial processes and risks in banks, the following strategies can be used:

1. **Attention to data analysis:** Using data analysis and financial analysis tools helps the bank to identify suspicious patterns and behaviors and to address financial risks.

2. Improving internal controls: Strengthening internal controls in all financial and operational processes reduces the risks associated with errors, fraud and mistakes.

3. **Development of risk assessment methods:** Banks can develop methods to assess financial risks in various areas such as credit, profitability, liquidity, etc., in order to avoid risks in the best way.

4. Training and justifying employees: Training employees about internal controls, risk assessment methods, and internal audit concepts can help reduce risks.

5. **Defining Clear Responsibilities:** Defining detailed responsibilities for monitoring financial processes and risks leads to clear adjustments and ensures that no aspect of financial performance is left unattended.

6. Adapting to environmental changes: Banks must react to environmental, economic, legal, and technological changes and update controls and methods in accordance with these changes.

7. **Improve reporting transparency:** Financial and performance reports should be transparent and accurate in order to gain more trust to managers, shareholders and ultimately the public.

Facing management and risk challenges:

In line with the importance of monitoring financial processes and risks in banks, there are also challenges that can be answered using appropriate solutions:

1. **Complexity of processes:** With the increase in the variety and complexity of processes in banks, their monitoring will also be reasonable. Careful planning and the use of modern technologies help the internal auditor to manage this challenge.

2. **Regulatory changes:** Continuous changes in financial and banking laws and regulations require continuous adaptation and updating by the internal auditor. Continuity in training and informing new changes helps.

3. **Technological risks:** With the development of technologies and the increase of e-commerce, security and cyber risks have increased. The internal auditor should pay attention to identifying and reducing these risks.

4. Fraud and corruption: Financial fraud and corruption can harm banks. The internal auditor must deal with this challenge by identifying signs of fraud and corruption and creating effective reporting mechanisms.

5. **Provision of resources:** The internal auditor needs sufficient resources to perform his duties. Management of optimization resources and their proper distribution can manage this challenge.

**Progress in communication:**

Finally, improving communication within the bank and with executives and other units can also help strengthen the role of internal audit and increase the importance of monitoring financial processes and risks. The exchange of timely and up-to-date information brings about better coordination throughout the organization and allows the internal auditor to track the improvements and changes needed accurately and in a timely manner.

**Conclusion:**

Strengthening the importance of monitoring financial processes and risks in banks requires mastering various challenges and using appropriate solutions. By creating compliance with regulations, using technology, strengthening controls, training employees and strengthening communication, banks can make significant improvements in controlling their risks and financial productivity and effectively move towards sustainability and growth.