Internal audit monitoring activities involve inspecting the internal processes used to determine the quality of the
organisational systems and the robustness of the organisation’s outcomes. Once SBF employees expect monitoring to take
place, it becomes a normal part of the work culture. Their behaviour is influenced, and good behaviour becomes embedded
in SBF’s organisational culture and procedures.
Internal auditing should also ensure that risks are regularly assessed, meaning that risks are monitored and then assessed in
terms of probability and impact. This is very important in terms of SBF management being aware of all business risks and
ensuring their assessment is up-to-date. It also means that all risks are theoretically understood and there should be nothing
which comes as a surprise to management. Once risks are assessed, strategies can be selected for the management of those
risks, depending upon how each one is assessed.
Internal auditing of control activities as they relate to issues of capital adequacy are important to SBF shareholders. Control
activities may underpin the confidence of shareholders concerned about the value of their holdings and the ability of the bank
to meet its short-term liquidity needs. Adequate reporting should provide them with reassurance about the going concern
status of the bank and the value of their investment within it. A robust internal audit function can assure shareholders that
there are control activities in place, which safeguard the bank’s assets and sources of value, including controls on transactions
and anything else which ensures that management directives are actually carried out.
Finally, and more generally, internal audit also provides SBF shareholders with a robust assessment of the internal processes
of the business. The efficiency and effectiveness of internal control systems are material considerations to shareholders when
deciding on their investments.
