Repositioning Internal Audit as a Strategic Finance Function in Modern Banking Organizations

In modern banking organizations, the role of internal audit has undergone a fundamental transformation driven by increasing financial complexity, heightened regulatory expectations, and the growing demand for strategic risk awareness at the executive level. Traditionally positioned as a control-oriented assurance mechanism, internal audit is increasingly expected to contribute to financial decision-making, governance quality, and long-term value creation. This article argues that internal audit should no longer be viewed as a peripheral oversight function, but rather as an integral component of the strategic finance architecture within banking institutions. Drawing on contemporary finance and governance literature, the study conceptualizes internal audit as a strategic finance function that operates at the intersection of risk intelligence, executive oversight, and financial stewardship. The analysis highlights how heads of internal audit contribute to board-level financial governance, influence managerial judgment, and support risk-based financial strategies that extend beyond compliance objectives. By examining the evolving responsibilities of internal audit leaders, the article demonstrates how internal audit enhances financial transparency, strengthens decision quality, and supports sustainable performance in complex banking environments. The paper further discusses organizational and structural challenges associated with repositioning internal audit within the finance domain, including authority boundaries, cultural resistance, and regulatory constraints. Ultimately, this study contributes to the finance literature by offering a managerial framework that redefines internal audit as a value-creating finance function, emphasizing its strategic relevance for modern banking organizations and executive financial leadership.

Authors

Publication Details

Journal
Iconic Research and Engineering Journals
Published
2024-11-30
DOI
https://doi.org/10.64388/irev8i5-1714956
Primary Topic
Auditing, Earnings Management, Governance
Type
article
Field-Weighted Citation Impact
0.00
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article

Repositioning Internal Audit as a Strategic Finance Function in Modern Banking Organizations

Serhat Unsal
Iconic Research and Engineering Journals
Auditing, Earnings Management, Governance
article

Repositioning Internal Audit as a Strategic Finance Function in Modern Banking Organizations

Serhat Unsal
article en

Abstract

In modern banking organizations, the role of internal audit has undergone a fundamental transformation driven by increasing financial complexity, heightened regulatory expectations, and the growing demand for strategic risk awareness at the executive level. Traditionally positioned as a control-oriented assurance mechanism, internal audit is increasingly expected to contribute to financial decision-making, governance quality, and long-term value creation. This article argues that internal audit should no longer be viewed as a peripheral oversight function, but rather as an integral component of the strategic finance architecture within banking institutions. Drawing on contemporary finance and governance literature, the study conceptualizes internal audit as a strategic finance function that operates at the intersection of risk intelligence, executive oversight, and financial stewardship. The analysis highlights how heads of internal audit contribute to board-level financial governance, influence managerial judgment, and support risk-based financial strategies that extend beyond compliance objectives. By examining the evolving responsibilities of internal audit leaders, the article demonstrates how internal audit enhances financial transparency, strengthens decision quality, and supports sustainable performance in complex banking environments. The paper further discusses organizational and structural challenges associated with repositioning internal audit within the finance domain, including authority boundaries, cultural resistance, and regulatory constraints. Ultimately, this study contributes to the finance literature by offering a managerial framework that redefines internal audit as a value-creating finance function, emphasizing its strategic relevance for modern banking organizations and executive financial leadership.

Iconic Research and Engineering JournalsVol. 8(5)
Peace, Justice and strong institutions
Openalex Percentile: Top 28%
Auditing, Earnings Management, Governance
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