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
Date Written: March 22, 2018
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: Suggested Citation