REGULATION OF ASSESSMENT OF THE RISK MANAGEMENT SYSTEM BY EXTERNAL AUDIT IN THE CONTEXT OF FOSTERING MORE EFFICIENT RISK MANAGEMENT - A REVIEW OF THE BANKING SECTOR OF BIH

Abstract

In this study, regulatory requirements are elaborated regarding external audit in the assessment of the risk management system and the impact of the regulation of risk management system using independent external audit is investigated in the context of encouraging effective risk management in the banking sector of Bosnia and Hercegovina. The research was conducted through a questionnaire, which included a representative sample consisting of all the banks in BiH, within which employees at control functions are included (risk management, internal audit and internal control), along with members of bank boards (Supervisory board, Audit Committee, Bank Management), and relevant external auditors conducting audits in the banks  in BiH, as well as professional academic public. The results of the research show a high degree of correlation of the regulation of risk management system by independent auditors and risk management efficiency, but also identify additional mechanisms which encourage more efficient risk management in banks and, consequently, reveal new research areas.