Towards a Proactive Role of Internal Auditors in Anti-Money Laundry Compliance Review: An Egyptian Perspective

Research Journal of Finance and Accounting, Vol. 9, No. 6, 2018; ISSN (Paper)2222-1697 ISSN (Online)2222-2847

10 Pages Posted: 8 May 2018 Last revised: 20 Jul 2018

See all articles by Sara H. Sabry

Sara H. Sabry

Egypt-Japan University for Science and Technology

Date Written: March 22, 2018

Abstract

The banking sector is crucial to any financial sector's stability and prosperity. But Money laundering (ML) threatens such stability through its vicious consequences. Thus, the need for a solid and rigorous AML programs emerged. In the light of the drastic evolution of the business environment over the last decades to rely heavily on information technology (IT), the new role for internal auditors (IAs) needed to convoy such evolution by advancing from a traditional and reactive role to a more proactive and strategic role. No study has closely investigated the impact of IAs involvement in IT governance on IAs effectiveness in AML compliance review. A survey was developed based on the prior literature and was administered to IAs in the Egyptian Banking sector. In all, 39 usable questionnaires were received. Smart partial least square was used to analyse the responses, the results indicated that IAs involvement in IT governance structures and relational capabilities significantly affected the IAs effectiveness. But IT involvement in processes was found to be insignificant. The overall results should be useful to banks in general, seeking to utilize the IAs to their full aptitude in combating ML through improving the IAs effectiveness in AML compliance review.

Keywords: IT governance, AML compliance review, Internal Auditors

JEL Classification: M42

Suggested Citation

Sabry, Sara H., Towards a Proactive Role of Internal Auditors in Anti-Money Laundry Compliance Review: An Egyptian Perspective (March 22, 2018). Research Journal of Finance and Accounting, Vol. 9, No. 6, 2018; ISSN (Paper)2222-1697 ISSN (Online)2222-2847, Available at SSRN: https://ssrn.com/abstract=3166773

Sara H. Sabry (Contact Author)

Egypt-Japan University for Science and Technology ( email )

Borg El Arab
Alexandria, 00203
Egypt

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