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Internal Audit Standards in Iraqi Commercial Banks: An In-Depth Analysis

A recent study published in the International Journal of Professional Business Review has shed light on the extent to which internal auditing standards are applied in Iraqi commercial banks. The research, conducted by Hussaina K. N. and Abdulahad A. F., aimed to investigate the application of features and performance standards in internal auditing work.

Background

Despite the importance of internal audit in Iraqi commercial banks, there is a lack of specific rules and standards governing the work of internal auditors in the banking sector. This has led to heterogeneity in the application of procedures, resulting in differences in business results without observing minimum levels of coordination.

Research Methodology

A sample of 48 internal auditors working in listed Iraqi commercial banks was selected for the study. A questionnaire was distributed to all members of the sample, and a response rate of approximately 75% was achieved.

Results

The results showed that there is a significant difference between the expected and actual application of internal auditing standards in Iraqi commercial banks. The study found that:

• Only about 30% of the respondents agreed that their banks apply feature standards for internal auditing issued by professional organizations.
• Similarly, only about 25% of the respondents agreed that their banks apply performance standards that must be taken into account in internal audit work.

Analysis

The researchers used statistical methods, including descriptive statistics and hypothesis testing, to analyze the data. The results confirmed both hypotheses, indicating a lack of application of feature and performance standards in internal auditing work in Iraqi commercial banks.

Implications

The study’s findings have important implications for:

• Internal auditors: highlighting the need for specific rules and standards governing their work.
• Bank management: emphasizing the importance of adopting international best practices in internal auditing to enhance the profession’s credibility and effectiveness.
• Regulatory bodies: underscoring the need for standardization and consistency in business results and coordination in procedures.

Conclusion

The study highlights the need for specific rules and standards governing the work of internal auditors in the banking sector to ensure consistency in business results and coordination in procedures. The adoption of international best practices in internal auditing is essential to enhance the profession’s credibility and effectiveness.

Source

Hussaina K. N., Abdulahad A. F. (2022). The Extent of the Application of Internal Auditing Standards in Iraqi Commercial Banks. International Journal of Professional Business Review, 7(3), 01-18.