At the same time, banks in this country remain quite healthy--with strong profits and rates of return and with capital and reserves not much below recent historical highs. Our banks have been able to retain their strength in this business cycle, in contrast to the early 1990s when so many either failed or had neardeath experiences. Why is this?
•  Are the resources available to our internal audit function adequate given the nature, complexity, and risk of our institutions' activities? •  Are weaknesses being fully identified and reported promptly to us? External auditors can also help federal regulators by encouraging financial institutions to frequently reassess and refine their risk-management practices.