Provide a Model of Factors that Affect External Audits of Banks on the Basis of Effective Banking Supervision Approach

Document Type : Research Paper

Authors

1 Islamic Azad University, Science and Research Branch, Tehran, Iran

2 Associate Professor of Accounting, Islamic Azad University, Central Tehran Branch, Tehran, Iran

Abstract

Purpose: This research seeks to provide a model of factors that affect external audits of banks on the basis of 29 Basel Core Principles for Effective Banking Supervision.
Method: To identify the effective factors in the qualitative segment, the Fuzzy Delphi Method (FDM) was used, in addition to interviews with the selected experts through purposive sampling. In the quantitative segment, questionnaires were distributed among the banking experts and supervisors, as well as auditors to develop a model. The data were analyzed using structural equation modeling (SEM) and PLS software.
Results: The findings suggested that 31 items are effective as latent variables include selecting external audits, executing audit operations, and reporting, on the external audits of banks basis of 29 Basel Core Principles for Effective Banking Supervision.
Conclusion: The obtained effective factors are a turning point to align the external auditors and banking supervisors in Iran to substantially improve the health of the banking network of the country and protect people’s interests, especially the depositors.
Contribution: Taking into account that this research is the first study on bank audit and banking supervision emphasizing the international documents in banking, it has suggested an appropriate framework to audit banks and interact between the external auditors and banking supervisors. Furthermore, its results help expand the literature in the field of banking supervision and audit.

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History

  • Receive Date: 08 October 2022
  • Revise Date: 06 March 2023
  • Accept Date: 12 March 2023

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