Internal Audit

The Institute of Internal Auditors defines internal audit as “an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes”.

A strong internal control system, including an independent and effective internal audit function, is part of sound corporate governance.

Banks should have an internal audit function in line with BDL circular No.77, with sufficient authority when carrying audit operations, stature, independence from the body entrusted with the operations, resources commensurate with the bank size and diversification of activities and nature of risks, as well as access to the board of directors.  Independent, competent and qualified internal auditors are vital to sound corporate governance.

Banks should also establish an audit committee in line with BDL circular No. 118, responsible for providing oversight of the bank’s internal audit function. The internal audit committee is established within the board of directors, and formed of at least 3 non-executive board members, with the chairman being an independent board member.


Basel References
Title Date of Issue 
The Internal Audit Function in Banks   28/6/2012
The Internal Audit Function in Banks   2/12/ 2011


BDL & BCCL Related Circulars
 BDL Basic Circulars  BCCL  Circulars Banks Financial Institutions
BDL Basic Cir. No.77 En Ar BCCL Cir. No. 271  
BDL Basic Cir. No.118