- Internal Audit
Banks also perform internal audits for which they appoint an Internal Auditor to make a regular check on the financial activities of the bank throughout the year. Internal audit has several aims and principles to which it is necessary to adhere to. It is the board of directors of the bank, however, which bears final responsibility that the bank’s management applies an appropriate and effective system of internal control, a system of evaluating banking activity risk and risks concerning bank capital, appropriate methods of monitoring compliance with laws, measures, and internal procedures.
- External Audit
An External audit is a process by which an independent External Auditor will obtain sufficient appropriate audit evidence to give reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error. This enables the Auditor to express an opinion on whether the financial statements are prepared, in all material respects, in accordance with an applicable financial reporting framework, and to report on the financial statements in accordance with the auditor’s findings.
- Statutory Audit
Statutory Audit itself comprises the word statute, which means regulation. Thus, it can be understood easily that the statutory audit is a mandatory audit defined under the law, in this case, the Companies and Allied Matters Act (CAMA) 2020, or as directed through policies from the Central Bank of Nigeria.
Some of the important aspects which should be covered under statutory audit are cash verification, tax-related issues, and loan accounts verification. After that, an Auditor prepares an audit report defining his opinion on a financial statement for which he has been allotted a specific time under which he has to perform an audit and submit his report.
- Concurrent Audit
Banks deal with a large number of transactions daily whose examination is also necessary on a continuous basis for determining the accuracy of the financial statement. For conducting such an audit, an external auditor is appointed by the bank known as a Concurrent Auditor who performs an audit of the transaction on a monthly basis.
The main objective of conducting a concurrent audit is to ensure compliance with the internal systems, procedures, and guidelines of the bank.