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Banks still having problems with internal auditing
While independent auditing has existed in Vietnam for more than 10 years already, the concept of internal auditing remains unfamiliar to many managers.
The State Bank of Vietnam on August 1, 2006 promulgated Decision No 37, asking commercial banks to establish their own internal auditing divisions. In 2007 and 2008, many banks set up divisions in accordance with the decision.
However, a recent survey conducted by PricewaterhouseCoopers Vietnam (PwC) on internal auditing showed that banks are still having a lot of problems.
PwC surveyed nearly 30 operational banks in Vietnam, including foreign-owned banks, joint-venture banks, joint-stock and state-owned banks. 90% of the surveyed banks have been operating in Vietnam for more than 10 years.
The survey showed that many banks are lacking clear and long-term strategies for internal auditing. 41% of the polled banks said that they still did not have a process for internal auditing.
The result has reflected the reality that internal auditing is a new field in Vietnam which still does not have clear standards.
The State Bank of Vietnam has promulgated a document guiding the functions of internal control and internal auditing: Decision No 36 dated August 1, 2008. However, 78% of polled banks said that there is overlapping in the roles and responsibilities of the functions of internal control and internal auditing.
The second problem is in the quantity and quality of internal auditors. Though the surveyed banks all have wide operation networks, nearly 70% of them said that they had less than 20 internal auditors. Only one bank said that it had over 100 internal auditors.
“We have had discussions with some banks and have found out that banks are facing difficulties in recruiting internal auditors as the pay for the auditors is uncompetitive, or the career future of internal auditors is not clear,” said Nguyen Viet Thinh, representing PwC.
Credit and accountancy have been found as the two fields that internal auditors paid most of time (52%), while they spend only 7% of time on other fields like card centre, payment centre or capital sources. 30% of banks said that they had not audited their information technology.
There is another challenge that PwC has found with its survey: Internal auditors do not have the trust of the main parties who have related interests.
PwC said that there is no single solution to the problems banks’ internal auditors are facing. It said that focusing on building up a suitable strategy on internal auditing development and on information technology should be seen as the two main factors that can help banks successfully build up their internal auditing.
VietNamNet, TBKTVN
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