Introduction
HC-6.5.1
Conventional bank licensees must establish and implement an effective internal audit function which provides an independent and objective assurance to the board of directors andsenior management on the quality and effectiveness of a bank's internal control, risk management and governance systems and processes, to protect the bank and its reputation.Added: April 2018HC-6.5.2
The internal audit function must develop an independent and informed view of the risks faced by the bank based on its access to all bank records and data, its enquiries, and its professional competence. The internal audit function must discuss its views, findings and conclusions directly with the audit committee and, if necessary with the board of directors at their routine quarterly meetings, thereby helping the board to oversee
senior management .Added: April 2018HC-6.5.3
In this Section, all references to the board of directors may also be taken as referring to the bank's audit committee where the audit committee is mandated to carry out such functions on the board's behalf.
Added: April 2018HC-6.5.4
For
branches of foreign bank licensees , and where no local board of directors exists, all references in this Module to the board of directors should be interpreted as the Head Office/ Regional Office.Added: April 2018HC-6.5.5
Branches should ensure that equivalent arrangements are in place at the parent level for the requirements in this Section and these arrangements provide for an effective internal audit function over activities conducted under the Bahrain license.
Amended: October 2018
Added: April 2018HC-6.5.6
The extent of application of this Section must be commensurate with the significance, complexity and international presence of the bank (principle of proportionality).
Added: April 2018HC-6.5.7
The key features for the effective operation of an internal audit function are:
(a) Independence and objectivity;(b) Professional competence and due professional care; and(c) Professional ethicsAdded: April 2018
