AUDIT & INSPECTION IN INDIAN BANKS OPPORTUNITIES AND CONCERN

"Internal Auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations

- Raj Kumar Sharma

Introduction

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" -The Institute of Internal Auditors.

The soundness of the Banking System in any country is a major indicator of the economic strength of that country. The emergence of a robust banking system contributes to the economic development of a country. Banking system in the world undergoing substantial ups and downs especially in the last decade and India is also not an exception. One has to appreciate the strength and the manner in which the banking system in India has withstood the pressures. The credit for this sustenance goes to all those who were controlling and managing the banking system during this turbulent period.The Audit of banks has played a major role in assisting the Regulators to supervise the entire banking system in the country even through these difficult times.

Audit is an Independent Management Function, which involves a continuous appraisal of the functioning of entity's Strategic Risk, Management Risk and Internal Control System. The prime responsibility of the internal audit function is towards the Top Management. In liberalized environment, its role is much wider. It owes greater responsibility towards shareholders, depositors and regulators.

Banking Structure in India