An assessment of internal audit enforcement on risk management effectiveness in banking: a case study of Guaranty Trust Bank
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Background of the Study
Internal audit enforcement is a critical component of effective risk management in the banking industry. Guaranty Trust Bank (GTBank) has significantly strengthened its internal audit functions to ensure adherence to risk management protocols and operational standards. By implementing rigorous audit procedures, real-time compliance monitoring, and continuous process improvement measures, the bank aims to identify and mitigate operational and financial risks proactively (Babatunde, 2023). The theoretical framework for this initiative is rooted in risk management and corporate governance theories, which emphasize that robust internal audits contribute to enhanced operational integrity and reduced risk exposure. GTBank’s strategy includes periodic audits, internal controls reinforcement, and targeted staff training programs to promote a culture of accountability and transparency (Okeke, 2024). Empirical evidence indicates that organizations with strong internal audit enforcement tend to have lower incidences of risk events and better overall performance. However, challenges remain in integrating new audit technologies with existing systems and ensuring consistent audit practices across all departments. This study aims to assess how internal audit enforcement affects risk management effectiveness at GTBank, identifying key operational challenges and offering recommendations to optimize audit practices (Chinwe, 2025).
Statement of the Problem
Despite robust internal audit systems, GTBank continues to face issues in achieving uniform risk management effectiveness. Inconsistencies in audit enforcement across departments have led to gaps in identifying and mitigating risks, thereby increasing the likelihood of operational failures (Olu, 2023). Integration challenges between new audit tools and legacy systems often result in delayed reporting and insufficient corrective measures. Additionally, variations in staff training and resistance to adopting new audit practices further contribute to inconsistent risk management outcomes. These discrepancies undermine the bank’s efforts to maintain a resilient operational framework and expose it to potential financial and reputational risks. The gap between the expected benefits of stringent internal audit enforcement and the actual risk management performance necessitates a detailed investigation. This study seeks to identify the key factors that impede effective audit enforcement and to propose strategies for enhancing internal controls and risk mitigation processes at GTBank (Emeka, 2024).
Objectives of the Study
To assess the impact of internal audit enforcement on risk management effectiveness at GTBank.
To identify integration and training challenges affecting internal audit practices.
To recommend strategies for optimizing internal audit enforcement to improve risk management.
Research Questions
How does internal audit enforcement affect risk management effectiveness at GTBank?
What are the primary challenges in integrating new audit technologies with legacy systems?
How can internal audit practices be improved to ensure consistent risk management?
Research Hypotheses
Robust internal audit enforcement is negatively correlated with risk incidents.
Integration issues negatively impact the effectiveness of internal audits.
Enhanced staff training and system upgrades lead to improved risk management outcomes.
Scope and Limitations of the Study
This study focuses on GTBank’s internal audit practices over the past three years. Limitations include restricted access to internal audit data and challenges in isolating audit effects from other risk management initiatives.
Definitions of Terms
• Internal Audit Enforcement: The processes and systems used to ensure compliance with internal control standards.
• Risk Management Effectiveness: The degree to which risks are identified, mitigated, and controlled.
• Corporate Governance: The system by which banks are directed and controlled.
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