Challenges and Solutions of External Audit of Banks based on effective Banking Supervision Approach Based on Basel Committee documents
Subject Areas : Financial Economics
seyed mohammad reza razavi araghi
1
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,
آزیتا جهانشاد
2
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1 - Department of Accounting, Science and Research Branch, Islamic Azad University,Tehran, Iran.
2 - گروه حسابداری، واحد تهران مرکزی، دانشگاه آزاد اسلامی، تهران، ایران
Keywords: Banking Supervision, External Audit, Basel Committee, Fuzzy Delphi Method, Structural Equation Model,
Abstract :
This research identifies challenges to the process of external audit of banks with an effective banking supervision approach and offers solutions for improving this process. Using the structural equation modeling, it provides a model of challenges and solutions related to the external audit of banks. For the qualitative part, the challenges and solutions were identified by interviewing the banking and auditing experts and by adopting the fuzzy Delphi method. In this research, judgmental sampling, a subcategory of purposive sampling, was used to apply the Delphi technique. Effective factors related to the challenges to the bank audit process were identified in three aspects of internal, procedural, and environmental challenges, with 29 items in total. The solutions found were identified as those related to external audit ors and to banking supervisors, with 26 items in total. For the quantitative part, to develop the research model, a questionnaire was distributed among the banking experts and supervisors as well as the external audit ors of banks. The data were analyzed using the structural equation modeling with SmartPLS. The results showed that all three aspects identified for the challenges to the bank audit process have a negative significant effect, and the solutions proposed for external auditors and banking supervisors have a positive significant effect, on external audit of banks.