BY MICHAEL EBOH & FAVOUR AGBI

To prevent another round of crisis in the Nigerian financial sector, there must be a clear separation of the internal audit functions in banks, says Mr. Kehinde Durosinmi-Etti, Group Managing Director/Chief Executive Officer, Skye Bank Plc.

Durosinmi-Etti, in his paper titled, ‘Preventing Another Banking Crisis: What Role for the Internal Auditor,’ presented at the monthly meeting of the Committee of Chief Inspectors of Banks in Nigeria, CCIBN, hosted by Skye Bank Plc, said banks must guarantee the independence of the internal audit function by ensuring that the head of the department report to the chairman with a dotted reporting line to the chief executive officer.

According to him, this would embolden the internal auditors to carry out their jobs without fear of persecution and free them from becoming an appendage of the chief executive.

He maintained that faithful implementation of this reporting line would help ensure strict independence of the auditors in the discharge of their responsibilities.

He advised that audit committee of banks, comprising mainly non executive directors, be responsible for reviewing and approving the internal audit work plans, as well as ensuring that appropriate actions are taken by management on issues raised.

Durosinmi-Etti further called for the alignment of audit functions with stakeholders’ expectations by assuring the Board and the Audit Committee on the effectiveness of risk management practices and on the adequacy of financial and operational controls as well as serving as their ‘ears and eyes’.

This, he said, will help prevent another crisis in the financial sector. He tasked auditors on the need to provide independent and objective feedback on areas of interest, point out company-wide potential risks as well as providing insights on cost-saving opportunities and identify key risks.

He said, “Owing to the significance of evolving issues in risk management, technology, operations among others, practitioners should improve on the platforms for shared experiences among banks.

This will enable faster diffusion of latest developments and thus provide internal auditors with relevant tools to manage such emerging risks.”

Durosinmi-Etti further called for skill development, competence and professionalism in all areas as experience in audit work gained either in an external accounting or internal audit environment and other relevant environments.