General Studies · Risk-Based Internal Audit
Under the guidelines for Risk-Based Internal Audit (RBIA) in banks, an audit team observes a very high staff turnover in the clearing department and a total lack of enforcement of the mandatory leave policy. How does this finding affect the risk assessment of the branch?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1It is classified purely as an administrative human resource issue and excluded from the operational audit scope.
- 2It has no impact on the overall Risk Rating as long as the daily transaction sheets are balanced and cash tallies with the system.
- 3It decreases the Credit Risk rating because the high staff turnover prevents prolonged collation with bad borrowers.
- 4It increases the Operational Risk rating because the absence of mandatory leave raises the risk of undetected fraud and compromises internal dual control.✓
Correct answer
It increases the Operational Risk rating because the absence of mandatory leave raises the risk of undetected fraud and compromises internal dual control.
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