Assessing the Effectiveness of Internal Audit Units in Addressing Bank Fraud. Evidence From the Greek Banking System

Abstract

The purpose of this study is to evaluate the effectiveness of Internal Audit (IA) units of major Greek banks in addressing fraud. The research methodology implemented is a qualitative survey applying a self-structured, properly designed questionnaire, comprised of twenty targeted questions, using the five-point Likert scale. The findings of the study showed that Greek banks’ IA units are well organized in terms of established policies and procedures, existing internal control mechanisms and risk assessment. On the other hand, weaknesses are identified in matters of proper usage of Computer Assisted Audit Techniques (CAATs), establishing a well-designed open-door policy and in the existence of an ongoing anti-fraud training for all the IA staff. The results of the study also provide useful findings on the operation of IA units and offer invaluable insights to banks’ managements as for further enhancing IA procedures in the endless fight against fraud.