Benchmarking internal control systems in australasian financial institutions

Abstract

This paper benchmarks risk control systems in Australian financial institutions against the core principles set out the Basel Committee for Banking Supervision in its 1998 guidelines: Framework for Internal Control Systems 1n Bank1ng Organisations. This framework was developed by the Committee in response to its examination of losses at several major banking organisations, which indicated that problems could have been avoided had the organisations maintained effective internal control systems. This study is based on a s urvey of twenty-one Australasian financial institutions, comprising assets in excess of $A900 billion and representing approximately 75% of banking assets in the region. The study was initiated by the Australian Financial Markets Association, in conjunction with the Securities Research Centre of the Asia- Pacific (SIRCA) and Pricewaterhouse Coopers. The survey participants comprise commercial banks, investment banks and government financing authorities.