In an ideal world, you’d have a full audit and a full inspection of your bank.
However, many banks have had their audit and inspection systems thawed out, and it is now unclear whether the process is complete.
The Australian Financial Services Union (AFSU) has recommended that banks adopt a “thawed-outsourcing” approach to auditing, and the industry body’s report calls for a “bilateral audit” to be introduced.
A review of the audit process in the banking industry by the Institute for Finance and Business Research (IFBR) has found that, in its assessment of banks’ audit processes, the audit committee and the audit report committee were not properly aligned, leading to poor outcomes for both.
The IFSB recommended that all audit processes be conducted by a single team of experienced audit professionals.
The report, titled Audit and Inspection: What Happens Next?, also found that the audit system in the industry was not well trained and that staff were not adequately trained to perform the required work.
The audit committee had the authority to decide on audit reports and recommendations, but did not have the ability to conduct those reviews.
“It is not surprising that in the face of an increasingly fragmented and under-resourced audit service, there has been a lack of coordination, and in some cases, even failure to coordinate, across the various agencies involved in conducting an audit,” the report said.
The AFSU is calling for a new audit and inspections regime to be created, as well as a “seamless, agile” audit and assessment process.
The organization has recommended a review of all financial audit systems and the role of a third party audit auditor.
This could involve a third-party audit provider, which could be a third audit service provider.
The IFBR also recommended that the Government should set up a new body to oversee and oversee the audit and reporting of financial data, including those which are in the public domain.
“We believe that the role and responsibilities of a central regulator should be transferred to a separate body, whose role and functions should be defined by a clear set of regulations,” the IFBR said.