The survey covered about 30 commercial banks operating in the country. About 41 per cent of existing internal audit functions are cent-ralised.

And in 78 per cent of the cases, the internal audit and the internal inspection functions overlap.

The survey also reported a lack of sufficient IT knowledge, which has been identified as an area of concern.

The survey focused on analysing the state of internal audit practices. Its questionnaire was structured to address eight key areas relevant to the internal audit function: organisation, mandate, skills and knowledge, risk assessment, audit process, audit report, quality control and challenges to implementing the internal audit function.

Internal audit practices are one of several operational areas where banks can start making improvements, regardless of macroeconomic difficulties, according to PricewaterhouseCoopers.

Independent audit

Commenting on the survey results and its implications, Marius Kunneke, the partner in charge of the Performance Improvement Advisory Business of Pricewaterhouse-Coopers Vietnam, highlighted that "banks should have a clearly articulated long-term strategy for internal audits, and the function should have appropriate mandate-guaranteeing independence."

He added that current waknesses could be addressed by faster and better adoption of inernational best practices an more widespread use of advanced IT tools.

"According to the results, we feel that internal auditors have yet to earn the level of credibility from stakeholders that are in-line with the importance of the function.

The lack of a proper performance measurement system and inadequate support from boards of directors or members of supervisory boards may also be contributors to the lower than optimal efficiency and effectiveness of internal auditors," he said

With respect to better use of information technology, Henri Hoang, Price-waterhouseCoopers’s Advisory Director in IT Effectiveness, commented: "Banks in particular rely heavily on information technology to offer an increasingly diversified portfolio of banking services.

They, however, are faced with the challenges of implementing comprehensive and well-tested IT controls to ensure proper protection of customer data as well as the integrity of financial and commercial data."

Finding internal auditors who have an appropriately balanced combination of financial audit and IT skills and experience will remain one of the greatest difficulties for the internal audit functions of the local banking industry, according to Henri.