Metrics of internal audit effectiveness in banking sector

This article attempts to analyze the metrics of internal audit function effectiveness. The authors reviewand discuss the metrics perceived as most relevant and appropriate to the banking sector. The literaturereview is supported by an attempt to introduce an additional metric of the internal audit function effectiveness.The methodology adopted in this paper bases strongly on the qualitative approach. The articleinvolves an analysis of available literature and own studies, as well as authors’ professional experiencein auditing. The metrics of internal audit function effectiveness presented in modern studies stronglyfavor qualitative approach, focused on assessing the input, process and output of internal auditors,and most notably recommendations issued and their implementation by organizations’ management.The authors suggest supplementing the list of available metrics with an additional method, stronglyconnected to financial performance of the banks employing the internal audit function. This articleintroduces an additional possible way of measuring the effectiveness of the internal audit function. Thismetric can be considered by the banks and can be further empirically verified for appropriateness byentities from other industries, from both private and public sector.