Istanbul Business Research
Fraud Audit in Banks: A Qualitative Research Regarding the Effect of Central Continuous Audit on Branch Activitiesİsmail Kaban, Mustafa Gül
Developments in information technologies bring about a radical transformation in business models. Data is the main concept at the center of this process. Storing the data accurately and reliably, processing and analyzing is critical functions of the informatics transformation. Internal audit practices are also affected by this transformation. Today, internal audit activities are based on data analysis and display a structure called central continuous audit. In this study, it is aimed to demonstrate the contribution to the branch activities with the effect on the branch personnel of the central continuous audit, which is applied as a new internal audit approach in the banking sector. Qualitative data analysis technique was used in the research and face-to-face interviews were conducted with bank managers having internal audit origin. The data obtained from the study were subjected to content analysis using the Nvivo 11 qualitative analysis program. The findings of the research show that there are some effects on the personnel and that they provide various contributions to the branch activities through central continuous audit. This fact presents a positive contribution to the fraud prevention.
Bankalarda Hile Denetimi: Merkezden Sürekli Denetimin Şube Faaliyetlerine Etkisi Üzerine Nitel Bir Araştırmaİsmail Kaban, Mustafa Gül
Enformasyon teknolojilerinde yaşanan gelişmeler iş modellerinde köklü bir dönüşüm meydana getirmektedir. Bu sürecin merkezinde veri kavramı yer almaktadır. Verinin doğru ve güvenilir bir şekilde depolanması, işlenmesi ve analiz edilmesi enformatik dönüşümün kritik işlevleri olarak öne çıkmaktadır. İç denetim uygulamaları da bu dönüşümden etkilenmektedir. Günümüzde iç denetim faaliyetleri veri analitiğine dayalı olarak yürütülen ve merkezden sürekli denetim şeklinde adlandırılan bir yapı sergilemektedir. Bu çalışmada bankacılık sektöründe yeni bir iç denetim yaklaşımı olarak uygulanan merkezden sürekli denetimin şube personeli üzerindeki etkisi ile şube faaliyetlerine katkısının ortaya konulması amaçlanmaktadır. Araştırmada nitel veri analizi tekniği kullanılmış olup müfettiş kökenli banka yöneticileriyle yüz yüze görüşmeler yürütülmüştür. Araştırmadan elde edilen veriler Nvivo 11 nitel analiz programı kullanılarak içerik analizine tabi tutulmuştur. Araştırma sonucunda ulaşılan bulgular merkezden denetimin etkin hile denetimi boyutuyla personel üzerinde birtakım etkiler oluşturduğunu ve şube faaliyetlerine muhtelif katkılar sağladığını göstermektedir.
Today, centralized inspection stands out as a modern risk-based inspection approach in the banking sector, which has a transactions-intensive character and faces new methods and risks of fraud. Recently, there is a shift of trend from branches to other service channels (e.g. internet branch, ATM) for the transactions performed in the banking sector. On the other hand, branches are still retaining their positions as service units where banking services are offered intensively. This indicates the need for effective management of fraud risks in branches. The banking sector has a pioneering role in the actualization of internal inspection practices in Turkey. Thus, it can be said that all kinds of developments in the field of internal inspection were extended to other areas through the banking sector. Risk-based inspection and technology-based continuous inspection/ centralized inspection come to the forefront among internal inspection practices performed in banks today. Within the scope of centralized inspection practices, scenarios are developed on the basis of certain risk constructs over banking transactions. Construct analyses and scenario development processes are conducted through brainstorming. The obtained scenarios are formulated by use of business intelligence software (e.g. ACL), and such formulas are applied to the data provided by the unit to be inspected. Risky transactions are determined by applying data mining techniques to accounting operations related to banking transactions as well as to system records. In this way, simultaneous inspections can be performed without the need for any physical presence in any branch. For instance, suspicious deposit and loan transactions performed in a branch can be monitored continuously. The purpose of this study is to answer the following research question: “What are the effects of centralized inspection, which is used in banks as a new internal inspection technique, on branch staff and its contributions to branch activities as an effective fraud detection and prevention function?”. In this regard, it is aimed to determine the effects of centralized inspection on branch staff and its contributions to branch activities. The primary motive of the study is to reveal the importance of centralized inspection activities, which are featured as a new internal inspection approach in the banking sector, for fight against fraud and the productiveness they provide for branch staff and branch activities. The case study method, which is a qualitative research method, was employed in the study. Centralized inspection, which is the subject of this study, is a new inspection method that has just started to be applied in the Turkish banking sector, and there is a knowledge gap on this subject. Therefore, it was considered necessary to have face-to-face interviews with implementers in order to obtain extensive and reliable information about centralized inspection. This is why the qualitative research method was used in this study. By this means, it was aimed to introduce the direct experiences and opinions of participants/implementers on the subject, which has little recognition, to the literature. The study was carried out in one of the largest publicly-held deposit banks of Turkey with the participation of bank managers. The research sample was determined through criterion sampling. On a voluntary basis, 14 managers who are experienced as inspectors, have worked in centralized inspection and/or on-site inspection units, and have branch experience except for one were interviewed based on semi-structured interview forms. The participants have almost 10 years-experience. Three are department managers in region headquarters; four are branch managers; five are managers in various branches; and two are managers in the head office. The research data were collected through interview. The data of the interviews with the bank managers were recorded via a recorder. The audio records of 14 managers interviewed in the study were transferred to the written environment without any change. Following the transcription, the obtained data were interpreted through content analysis. The content analysis on the responses delivered in the interviews showed that centralized inspection creates a sense of remote control among branch staff, leads to increased attention and prudence in transactions, and thus brings about reduced fraud risks thanks to deterrence they provide. In addition, centralized inspection motivates staff to improve themselves in their jobs. Centralized inspection was also seen to have various contributions to branch activities such as sharing the branch manager’s inspection load and ensuring the allocation of more time to marketing activities. Furthermore, the risky transaction findings obtained in centralized inspection practices have a function of supporting the initiatives to be taken within the scope of branch management. Centralized inspection has critical importance for institutions like banks that have multiple branches. The possibilities offered by centralized inspection minimize problems about the competence of inspection team and the adequacy of inspection time encountered in conventional on-site inspection activities. Centralized inspection, which is a modern inspection technique complying with risk-based inspection conception, offers more security to relevant parties. Centralized inspection as a technology-intensive and transformative internal inspection approach can be considered as the equivalent of the notion of Industry 4.0, whose focus is unmanned factories in the field of production, in internal inspection. The findings of this study may be supported by qualitative and quantitative research to be carried out in different banks employing the centralized inspection technique. Thanks to such research, advantages offered by centralized inspection to branch activities may be revealed for the banking sector in general.