DIFFICULTIES FACED BY THE INTERNAL AUDIT DEPARTMENTS OF BANKS WORKING IN PAKISTAN

Abstract

Purpose- the purpose of this research paper is to explore the problems faced by the internal auditors of the banks working in Pakistan. The main objective is to reveal the problems created by the culture of Pakistani Banks and from the attitude of the Auditee. Methodology/sample- This research is an exploratory research in which the key factors are highlighted from the review of various literature reviews and from the informal interviews carried with the internal auditors. These independents variables are tested on the selected banks which are FBL, HBL, UBL and MCB. Questionnaire has been drafted which is based on the selected theoretical framework. These have been filled from total 80 respondents which are the internal auditors of this selected bank working in Karachi. Findings- based on the descriptive and inferential analysis it has been concluded that lack of trust is present between the auditor and Auditee, lack of co-operation from Auditee, negativity of the work audit, fear of audit, difficulties are faced in establishment of findings, Auditee operational duties, lack of Auditee understanding and knowledge of standards and prudential regulations, lack of departmental heads support(leadership support), lack of audit staff resource, culture of banks, seriousness in implementation of audit recommendations and lack of budget allocated to audit are the main problems which create hindrance in the work of internal auditors. Practical Implications- This research is highly significant for the banking sector of Pakistan particularly for the selected banks which are FBL, HBL, UBL and MCB. This research assist the management of the bank particularly to the audit committee and board of directors which have the main responsibility for the establishment and the work of the internal audit department and provide internal auditor an environment through which their effectives can be achieved