1.1.3.

5 Monitoring
Monitoring refers to the process of assessing the quality of the internal control structure over
time.
Since internal controls are processes, it is usually accepted that they need to be adequately
monitored in order to assess the quality and the effectiveness of the system’s performance over
time. By monitoring, the organization gets provided with assurance that the findings of audits
and
other reviews are promptly determined (Theofanis et al, 2011; Rezaee et al., 2001). Amudo and
Inanga (2009) add that monitoring of operations ensures effective functioning of internal controls
system. It’s through monitoring that an organization determines whether or not its policies and
procedures designed and implemented by management are being carried out effectively by
employees.
According to Bowrin (2004), monitoring can be achieved by regularly supervising and managing
activities like monitoring of customer complaints and feedback and audits conducted periodically
by internal auditors. Internal auditors can investigate and appraise internal control structure and
the
efficiency with which the various functions are performing their assigned duties. This way, they
can
bring a systematic and disciplined approach for the evaluation and improvement of risk
management activities and good governance process by examining of the internal controls and
evaluating how adequate and effective the controls are. Monitoring ensures that the findings of
audits and other reviews are promptly resolved (Rezaee et al., 2001).
In many cases, audits are not sufficiently rigorous to identify and report the control weaknesses
associated with problem banks. In other cases, even though auditors reported problems, no
mechanism is in place to ensure that management correct the deficiencies. The internal control
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framework underlying this guidance is based on practices currently in place at many major
banks, securities firms, and non-financial companies, andtheir auditors. Moreover, this
evaluation framework is consistent with the increased emphasis of banking supervisors on the
review of a banking organization’s risk management and internal control processes. It is
important to emphasis that it is the responsibility of a bank’s board of directors and senior
management to ensure that adequate internal controls are in place at the bank and to foster an
environment where individuals understand and meet their responsibilities in this area. In turn, it
is the responsibility of banking supervisors to assess the commitment of a bank’s board of
directors and management to the internal control process (Basle, 1998)