Internal Audit, Internal Control Systems in Finance Industry in the Changing Business Environment, Evidence From Turkey as an Emerging Economy

Abstract

The purpose of this chapter is to review internal audit and internal control functions in the banking industry by taking into account the international COSO framework. The financial industry is regarded as one of the key elements of a stable economy. It is a well-known fact that financial institutions in general—banks in particular (public or private, foreign or local)—need to have a sound internal system to implement the high principle of ‘maker-checker-supervisor-auditor'. The study examines the application of internal systems in the Turkish banking industry primarily and covers not only the theory, application, and legislative sides, but also organizational structure and development of audit and control activity in the banking sector.

Evaluation of the internal control system of banks listed on the Iraq Stock Exchange according to the COSO framework during the Covid-19 pandemic

“…One of the purposes of internal control systems is to reduce the risk of inability to achieve the company's predetermined objectives, in light of its strategies and related policies, and to manage these risks in a way that allows those responsible for managing the company to be rational in dealing with them. It is an ongoing process aimed at identifying, evaluating their nature and scope, and managing them efficiently, effectively, and economically (D'Aquila, 2013) (Kayhan, 2023;Ciobu & Tataru, 2021;Hamdan , 2019;Salman, 2021). Internal control provides independent safeguards and advice that help organizations manage crises effectively.…”

The Effect of Audit Quality, Auditor Independence, and Financial Reporting Transparency on Internal Control Effectiveness: A Case Study of a Public Company in Indonesia

“…The age distribution showed that the largest age group was 25-34 years (31.6%), followed by 35-44 years (25.5%), 45-54 years (22.6%), and 55 years and above (20.3%) [2]. In terms of education level, the majority of participants held a Master's degree (41.4%), followed by a Bachelor's degree (36.1%), and a Doctoral degree (22.5%) [3]. The distribution of positions revealed that mid-level positions were the most common (39.1%), followed by senior positions (36.8%) [4].…”

“…Prior studies have demonstrated that internal control systems have a positive impact on both financial performance and technological innovation [1], [2]. The relevance of internal control systems in reducing financial fraud holds significant value, especially within the framework of increased financialization [3]. Internal audit and control functions play a crucial role in the banking sector by facilitating the implementation of robust internal systems and safeguarding the stability of financial organizations [4].…”