Particularities of Bank Capital Adequacy Process Audit

Author:Univ. Prof. Victoria STANCIU, Ph. D.

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Keywords:capital adequacy, risk assessment, risk appetite, stress tests

Abstract:
Risk management process registered new important developments as result of the implementation of Basel II requirements in the Romanian banking regulations. Aiming to ensure the safety of the financial sector, Basel II Accord supplements capital requirements with regulations regarding risk management, internal control and calculation of economic capital. Recent years were characterized by important efforts in Romanian banking industry in order to implement all these new Basel II and EU requirements. The financial crisis has forced banks to take a critical look at how they manage risks and showed some weaknesses in banks’ risk management.\r\nThe present paper has as goal to emphasize the role of internal audit function in banking industry in this specific new financial and regulatory environment and to underline the most important aspects to be subject of the auditors’ analysis and assessment. Operating in this challenging environment and having to face new requirements, internal audit function has to adjust its objectives and to approach these objectives in a new perspective. \r\n\r\n

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