Money Bank was considered as one of the most stable and reputable banks. Its reputation took a severe hit when the Bank's “Hit your Six” strategy encouraged employees to sell six accounts per customer, whether needed or

CS Professional · Secretarial Audit, Compliance Management and Due Diligence · PYQS · June 2025
Money Bank was considered as one of the most stable and reputable banks. Its reputation took a severe hit when the Bank's “Hit your Six” strategy encouraged employees to sell six accounts per customer, whether needed or not. Branch employees were under constant pressure to meet daily sales targets, sometimes facing termination if they failed. The bank's aggressive sales culture, to meet unrealistic sales targets, led employees to create millions of fraudulent accounts without customer consent, including checking & savings accounts, online banking services, unauthorized bill payments, credit cards. Employees used forged signatures, fake email addresses, and fraudulent PIN numbers to register these accounts. Many customers were unknowingly charged fees for accounts they never requested. The whistle blowers were also ignored and fired when they reported unethical practices. There is great importance of internal audit in ensuring financial integrity, compliance, and risk management. Since the objectives of Internal audit were not followed by the bank, hence it failed to identify, detect and prevent the creation of millions of unauthorized customer accounts fraud for years. Elucidate through review and appraisal of what factors, the main objective of the internal audit process, to provide an assurance on the organization's risk management, internal control environment and governance framework can be achieved.

Answer & Explanation:

The main objective of the internal audit process is to provide an assurance on the organization's risk management, internal control environment and governance framework through review and appraisal of: Operational control framework including fundamental and basic systems in all areas of the business. The adequacy of risk identification, assessment and mitigation in the organization. This shall include fraud risks. Extent, adequacy, relevance of, and compliance of existing policy, plans and procedure documents within the Organization. The extent of compliance with relevant statutory requirements. Status of implementation of internal / external audit recommendations. Evaluating internal control. Internal control is broadly defined as a process, effected by an entity's board of directors, management, and other personnel, designed to provide reasonable assurance regarding the achievement of the following core objectives for which all businesses strive: Effectiveness and efficiency of operations; Reliability of financial and management reporting; Compliance with laws and regulations; Accomplishment of established goals for operations; Safeguarding of assets. Determines the risk area of the Organization. Establishes the risk management framework. Identifies potential threats and assesses risks. Decides on response to risks like implementation of control. Monitors and coordinates the risk management processes and the outcomes. Provides assurance on the effectiveness of risk management processes Conclusion; Hence, Money Bank should focus on doing Internal Audit for the Organization to achieve the objective.

Topics: Auditing

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