Risk-Based Audit in Commercial Banks of Iran

Proceedings of The 2nd International Conference on Advanced Research in Management, Economics and Accounting

Year: 2022



Risk-Based Audit in Commercial Banks of Iran

Samaneh Raiss Shaghaghi



Risk-based auditing has emerged as a critical subject for businesses, particularly banks, not only for their own profitability but also for the security of the financial system as a whole. Because risk-based auditing is more useful than traditional auditing in developing countries due to advancements in technology and its benefits, auditors must embrace risk-based auditing as a regular and popular practice. Risk-based audit, on the other hand, has not been well received in Iran, despite the fact that the issue has been discussed in the nation since 2010. This research focuses on the risk-based audit method and efficacy in Iranian commercial banks, as well as risk management and corporate governance policies and procedures. Questionnaires were utilized to conduct the research, and the findings show that risk-based auditing occurs alongside compliance auditing, although there are still distinctions between the two. Banking supervisors’ task is to identify, assess, monitor, and regulate the bank’s different risks, which might include endogenous risks and updates. Compliance audits do not include all types of management audits, which primarily involve bank-level control systems, internal management, and risk supervision and control.

keywords: banking; compliance audit; financial institution; middle east; risk management.