Following the EC Green Paper on corporate governance in financial institutions, upon which ECIIA provided commentary in 2010, the European Parliament adopted a resolution on the 11th of May 2011. The following is the full version of such resolution, evidencing in grey those paragraphs specifically regarding internal audit.
The resolution recognizes the importance of internal audit in the overall corporate governance context through the following statements:
- The Parliament calls for the establishment in all financial institutions of an effective governance system, with adequate risk management, compliance, internal audit functions (and, in the case of insurers, actuarial functions), strategies, policies, processes and procedures;
- The Parliament believes that an enhanced three-way dialogue between supervisors, auditors (both internal and external) and institutions would improve the likelihood of substantial or systemic risk being detected at an early stage; encourages supervisors, the European Systemic Risk Board, auditors and institutions to engage in open discussions and to increase the frequency of meetings in order to facilitate prudential supervision; further recommends that bilateral meetings take place between auditors and supervisors of major financial institutions; believes that it is the board and Internal Auditor's responsibility to ensure that necessary internal controls are in place to detect systemic risks and to establish a procedure for informing the board and supervisors of these risks in order to avoid negative consequences;
In addition you will read important input, among other things, on risk management, risk committees and internal control.
Click here to read the full resolution
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