Strong internal control, including an internal audit function and an independent external audit, are part of sound corporate governance. In banks, these are also important for the safety and soundness of operations and can contribute to an efficient and constructive working relationship between bank management and banking supervisors. Appropriate communication between banking supervisors and banks’ internal and external auditors will improve the effectiveness of audits and supervision. 2. In August 2001 the Basel Committee on Banking Supervision issued its best practices paper “Internal audit in banks and the supervisor’s relationship with auditors” (the Internal Audit Paper), which highlights the important work of internal auditors in banking organisations and the.
