Today, we do not make any distinction between “internal audit” and “management audit”. Whatever the term we use to call him, an internal auditor has to function as a management auditor as well. New challenges for internal auditors The expansion of banking business both horizontally and vertically over the years has posed new challenges to the internal auditor. This expansion has resulted in creating giant banking holding companies encompassing almost all areas of financial services. A bank which was confined only to borrowing and lending some six to seven decades ago is now a universal bank that provides all types of financial services to its customers. They may do it through different units or departments set up under one umbrella or through the establishment of a host of associate and subsidiary companies under one holding company. An internal auditor in a bank, therefore, cannot simply confine his work only to the main business of banking. Since there are cross-border risks involving different segments of a banking holding company, he now has to expand his area of operation to cover the entire business as a single entity. This adds not only a new work-load, but also a new challenge to an internal auditor. It behooves on the auditor to acquire new knowledge and skills to handle the job effectively. Hence, an internal auditor today has to be an all-rounder in banking and associated financial business, if he is to do his job effectively.
Hence, the auditor, including the internal auditor, is still a watchdog and not a bloodhound. 4  BIS Review 143/2007