Analysis of the effectiveness of internal audit tools in facing fraud risks: a comparative study on the banking sector

Abstract

The research aimed to analyze the effectiveness of internal audit tools in addressing fraud risks and to compare this effectiveness between the studied banks, with the goal of enhancing financial integrity, transparency, and institutional stability. The study employed a descriptive-analytical methodology. On the descriptive side, an analytical approach was utilized through a questionnaire developed based on measures created by various researchers to collect primary data and test the proposed hypotheses. The sample included internal auditors from the Iraqi Commercial Bank and Al-Tayef Islamic Bank. The main findings revealed a positive relationship between adherence to internal audit standards and addressing fraud risks. A significant relationship was also observed between the application of internal audit standards and the measurement of actual procedures for addressing audit risks, including fraud, from the perspective of both banks. Key recommendations include the necessity for senior management to adopt a clear and comprehensible internal charter that defines the objectives, authorities, and responsibilities of the internal audit department and provides the necessary support for its work