AUDIT COMMITTEES IN BANKS AND THEIR RESPONSIBILITY TO INTERNAL AUDIT FUNCTION

Abstract

Audit committees are responsible for overseeing internal controls and internal audit functions, as well as the external financial reporting process in banks. They are one of the most important organizational structures in the banks after the board of directors, and certain functions in the banks report directly to the audit committees. The paper analyzes the audit committees and internal audit function in the five largest banks in North Macedonia, whether they work efficiently and effectively, and whether the committees fulfill their responsibility to the internal audit function as best they can. The research was conducted through a structured questionnaire sent to the largest banks, namely to members of the audit committees, as well as employees of the internal audit department in those banks. All the results of the research are summarized in a conclusion that assesses the placement and adequacy of audit committees and internal audit function in the banks, as well as the extent to which the audit committees exercise their responsibility to the internal audit function.