Liquidity risk management in the banking audit

Author:university professor, PhD. Veronel AVRAM, university professor, PhD. Marioara AVRAM

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Keywords:liquidity risk, governance, internal audit, internal control

Abstract:
Ensuring the liquidity represents the main objective for the management of a banking financial institution. To attain and maintain the optimum liquidity represents a corner stone for the managers of this kind of institution because both the lack of liquidity, and over liquidity generates either supplementary costs, or not enough revenues obtained. Liquidity risk management asks for a series of measures which can be grouped as follows: \r\n- Supervision and involvement of those in charge with the governance;\r\n- Risks identification, assessment and monitoring;\r\n- control activities; \r\n- monitoring activities;\r\n- Reliable information systems \r\n\r\nApproaching the liquidity issues together with those in charge with the governance, with the bank management, with those individuals in charge with the internal audit and internal control, the external auditor will have to understand very well the problems related to the liquidity risk management of a banking entity, this allowing him/her to appropriately assess the audit risk.\r\n\r\n

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