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The Independence of Banks Internal Auditors from Banks’ Executives

Author

Listed:
  • Valbona Cinaj

    (University of Tirana)

  • Rebeka Ribaj

    (Ryerson University)

Abstract

Are internal auditors independent of banks’ executives? In the reality, what happens to the activity of auditors is described as "isolated activities†or at least “unobservable†for the rest of the organization except bank executives. Banks’ internal auditors operate based on a legal framework that is always improving, but in the meantime, the concern of their independence continues to be present evidenced even through interviews conducted with them for this paper. Internal Auditors have weakened their independence from Banks’ Executives because of being under pressure of keeping their job position. The point is that threats to independence are indirect and difficult to identify and measure. Subsequently, the control of the movement and autonomy of internal auditors can't be founded uniquely on consistency with legitimate and administrative acts. This paper infers that autonomy in the dynamic of inward examiners ensure the monetary soundness of banks and thus their customers and different partners. In the end, there are some conclusions and recommendations for enhancing the independence of internal auditors.

Suggested Citation

  • Valbona Cinaj & Rebeka Ribaj, 2020. "The Independence of Banks Internal Auditors from Banks’ Executives," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 846-852, December.
    • Handle: RePEc:ovi:oviste:v:xx:y:2020:i:2:p:846-852
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    References listed on IDEAS

    as
    1. Craswell, Allen T. & Francis, Jere R. & Taylor, Stephen L., 1995. "Auditor brand name reputations and industry specializations," Journal of Accounting and Economics, Elsevier, vol. 20(3), pages 297-322, December.
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    More about this item

    Keywords

    internal auditor; bank; independence; regulation;
    All these keywords.

    JEL classification:

    • A10 - General Economics and Teaching - - General Economics - - - General
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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