INTERNAL CONTROL IN BANK RISK MANAGEMENT SYSTEM

Abstract

Relevance of the study is determined by the need for continuous improvement in the process of management and control of banking. An author is defining the goal of article to research the main problems that are inherent to the modern bank activity in terms of internal control and to offer the action in order to improve internal control for minimization of bank risks as much as possible. The achievement of certain goal was assisted by settlement of following tasks: definition and classification of the aim of internal control; determining basic moments the violation of which will negatively influence the efficiency of all ways for minimizations of risks; revealing new uncontrolled risks in bank activity which appear due to modern development of many vital activities; realization of audit controls analysis in order to define their coverage size and evaluation of organization of internal control. In the article the modern state of the banking system of Ukraine is examined, and by results of analysis the necessity of internal control for minimizing of all types of bank risks is proved. An author pointed out negative factors which influence the efficiency of means for minimizations of risks and can bring a bank over to the critical financial condition. During the research it was proved that fragmentary approach of public audits is not expedient to use, because the process of internal control in that way does not reach the aim, namely providing of the proper level of reliability and stability of bank. The aims of process of internal control are classified. New out-of-control risks which are inherent to bank activity are set up. The essence of estimation of organization of internal control is set out. General measures as to the improvement of internal control in the bank system were offered.