Osibodu Harps on Risk Based Auditing

Mrs. Funke Osibodu, group managing director/Chief Executive of Union Bank of Nigeria Plc, has called on auditors/bank inspectors nationwide to embrace risk based auditing as a way of abating the spate of high corporate failures witnessed in the country in recent times.
In her goodwill message at the yearly conference of the Inspection Department of Union Bank held at its corporate Head Office, Marina Lagos, Osibodu recognized the department as one of the most important in any bank, stressing that inspection as the last mile, should always strive to live up to expectations.
She observed that the banking system had become so porous because the inspectors’ as the last defence line of the institutions had not been as effective as they ought to be, pointing out that the non-performing loan issues and bad debts in the entire banking system accumulated because the inspectors were preoccupied with the traditional auditing rather than risk based auditing system.
She argued that risk based auditing approach would further strengthen the business of banking which was predicated on banking; adding that it would give early warning signals, before any loan becomes bad debt.
Describing inspectors as men in black and tough people, she urged them to also wear their bullet proof vests, by striving to be diligent and exhibit the highest level of integrity in all their investigations even as they pursue any case of infraction to the conclusive end.
The Union Bank boss had postulated that the hallmark of good inspections do not lie in how many frauds they expose; but on how many of such cases are nipped in the bud; emphasizing that data integrity of any audit is the litmus test of it.
The conference observed that in the pursuit of traditional auditing, risk mitigants such as sectoral exposure limits, single obligor limits, loan approval limits, perfection of titles of securities for loan before disbursement, limits of insider lending and effective loan monitoring were not strictly investigated and monitored by inspectors
It also agreed that internal auditors should move from the traditional auditing with all its drawbacks to risk based auditing in the current dispensation.