Internal auditing - External auditing - supervising authority in banking (I)

Author:University Professor, PhD. Dumitru MATIŞ, Univ. lecturer, PhD Cristina Alexandrina PALFI

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Keywords:supervision, capital adequacy, risk exposure, internal control, management, reasonable assurance

Abstract:
The article tries to clarify the relations between the internal and the external auditing and the supervising authority in banking. The internal auditing aims at obtaining a reasonable insurance that the performed transactions and the adopted decisions are under control and that in this way the unitary objectives are met The internal auditing is thus helping the manager to achieve his goals by means of a systematic and well organized activity in view of evaluating and improving the efficiency of management and control processes.\r\n\r\nThe external auditing aims at expressing an opinion on the reality of the data in the financial statement in conformity with the applied accounting reference. The external auditor counts in his approach on the evaluations made by the internal auditor of the bank, regarding the risk of material errors, the risk of control and the testing of the internal control procedures. The authority of supervising aims mainly at prudential supervision in order to maintain the stability and trust in the banking system.\r\n\r\nThe supervising authority is watching: the adequacy of the capital of crediting institutions, risk exposure, organizing and functioning of the internal control system, the quality of the bank management. \r\n\r\nDespite the fact that these three activities have different objectives, are performed differently and involve different persons, they have a common goal, namely increasing the performances of crediting institutions and assuring an adequate competition climate.\r\n\r\n

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