INTERNAL AUDIT AS A MEANS OF COUNTERACTION FRAUD IN BANKS

Abstract

The article provides a thorough analysis of theoretical and practical aspects of banking fraud. Banking is one of the important elements of the system of social and economic relations in the country. The study of the existing system of banking operations revealed opportunities for financial fraud and the lack of measures to prevent them. Since the main structural elements of the banking system are banks, it is necessary to be very meticulous about the efficiency of their activities and to exercise both external and internal control over the performance of their inherent functions. This category is manifested in banking supervision carried out by the regulator – the National Bank of Ukraine. But internal control over the illegal actions of bank employees and insiders is no less effective means of detecting violations and preventing internal bank risks. Such control can be carried out by means of internal audit of the bank’s activity, by means of special procedures and methods of detection of elements of financial fraud. Bank fraud is a topic that is often ignored and the perpetrators are not punished at all, and, of course, information about such cases is not made public, because in the first place - it will affect the reputation of the bank. The main attention is paid to the analysis of possible schemes of banking fraud and their impact on the activities of a commercial bank, the material well-being of customers and the national economy in general. The problems of concealing the facts of participation in the internal fraud of bank employees in order to prevent deterioration or damage to the reputation of such a structure are emphasized. It is proposed to involve internal audit mechanisms to detect and prevent such criminal acts, using the provided proposals. However, researchers and researchers are still trying to investigate banking fraud and the possibility of preventing it through internal audit. Thus, after studying the regulations, periodicals and scientific publications on this topic, we can say that internal audit in modern conditions of banking development is thus an effective means of combating banking fraud, as external audit cannot guarantee users of financial statements of the bank or clients of the reliability of the internal control system, which is manifested in the fact that only internal audit, so to speak, within the bank, can detect certain crimes.