Establishing an Efficient Internal Control Structure

Dimitris N. Chorafas

Chapter 8 in Implementing and Auditing the Internal Control System, 2001, pp 185-209 from Palgrave Macmillan

Abstract: Abstract Whether the bank’s operations are centralized, decentralized, or organized along the principle of federated independent business units, a number of basic organizational prerequisites must always be present to ensure the observance of necessary functions and the fulfilment of basic requirements in the development and execution of internal control policies. The board and senior management need an internal control system able to support six basic issues characterizing a sound business practice: Goals of compliance, accounting reconciliation and preservation of assets Internal intelligence objectives for exposure control regarding trades, inventoried portfolio positions and other operations A mechanism for tracking fraud and other misdemeanours anywhere in the world, at any time Feedback risk control and other management controls everywhere the bank operates, at all organizational levels Feedback for corrective action, actuating the brakes to regulate or stop the risk-taking machine Feedback to assure that managers, professionals, and other employees operate in a manner commensurate with personal accountability.

Keywords: Internal Control; Mutual Fund; Credit Risk; Financial Service Authority; Efficient Structure (search for similar items in EconPapers)
Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-59786-0_8

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DOI: 10.1057/9780230597860_8

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