| With a view to equip the members in appropriately understanding the concept of risk based internal audit in banks and discharging their duties as internal auditors, the Committee on Internal Audit has brought out this Technical Guide. The Technical Guide deals with the significant aspects of risk-based internal audit in a simple and lucid manner. The Guide is divided in to four chapters. Chapter 1, Introduction, explains the concept of internal audit, need for internal audit in banks, the concept of risk based internal audit in banks, the cost-benefit analysis of internal audit, key audit decisions of a risk based internal audit, advantages of risk based internal audit and the distinction between risk based internal audit and risk management function. Chapter 2, discusses in details, the steps involved, in risk based internal audit in banks, for example, preparation, identification of auditable units, conducting risk assessment, preparation of risk based internal audit plan, identification of auditable units, preparation of risk matrix, key factors relevant for risk assessment, identification of inherent business risks. Chapter 3 deals with other related considerations such as functional independence, communication, performance evaluation, relationship with the external auditor. The last Chapter deals with the way forward. In addition, the appendices to the Technical Guide contain the relevant circulars of the RBI on the subject. |
