Узбекистон республикаси марказий банки узбекистон банклар ассоциацияси

THE ROLE OF AUDIT IN COMMERCIAL BANKS’ ACTIVITIES
Sattarov O. - phd, TFI 
Orzikulov B. - student, TFI 
Ziyodulloyev X. - student, TFI
The current researches which are being held throughout the world prove 
that the role o f audit in banks is a necessary key point to develop the banking 
system o f any country. That’s to say, without audit services, commercial 
banks will be bound to go quick bankrupt in the near future. Accordingly, the 
main target of audit is to improve the qualities o f bankmg services and 
operations, meanwhile properly usage o f documents is also taken into 
consideration by it.
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It is clear that audit encompasses several fundamental principles such as 
independence, objectivity, freedom, professional experience and secrecy,1 
and the companies which deal with this activity' must be registered by the 
Justice Ministry of the Republic of Uzbekistan. To speak more, there written 
some main professional services o f audit companies in the Article 17* of the 
law, for instance, carrying out accounting, restoring it, organizing financial 
account, conforming national account system to international standards and 
so on.
Every activity o f a commercial bank is verified by audit. To support it, 
in the process o f counting cash and securities which are in the checkout not 
only a bookkeeper and a cashier should participate, but also an auditor should 
participate too.
In Western Europe, for example, in Italy, audit companies usually 
evaluate the three following indicators which are important:" 
capital adequacy; 
assets quality; 
management quality.
Audit companies, on the other hand, investigate and examine the 
minimal requirements on the activities o f commercial banks. To give an 
example, minimal Tier 1 Capital according to Basel III should be minimal 
5,5% for the first day ofJanuary o f 2014, however the percentage, as it has 
been instructed, should be raised to 6% by the year o f 2019 and it reveals that 
all activities o f banks must be regularly controlled by internal and external 
auditors3. Look at the schedule4:
2005-2012 Industry Analysis o f Total Audit Fees as a % o f Total Revenue
Industries
Anylized
2005
2006
2007
2008
2009
2010
2011
2012
Commercial
Banking
0,062% 0,054% 0,048% 0,059% 0,068% 0,069%
0,075% 0,078%
Direct Property 
and Casualty 
insurance Carrier
0,085% 0,085% 0,092% 0,122% 0,080% 0,083%
0,090% 0,073%
Pharmaceutical
Preparation
Manufacturing
0,074% 0,076% 0,068% 0,066% 0,064% 0,059%
0,059% 0,061%
Saving
Institutions
0,117% 0,107% 0,107% 0,197% 0,179% 0,180%
0,177% 0,202%
The research is based upon an extract from the Audit Analytics’ database download on 
6/26/13
1 4 ’About adding adjuncts and changes to the law «About the activity of Audit», Article 2 \ the 
Republic of Uzbekistan.
2 Т.В.Ножкина, Международный аудит. Петравловек-Камчатский, 57 стр, 2007
3 Basel Committee Banking Supervision, www.bis.org.
4 http://www.auditanalytics.com
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As the table showed, audit fees in total revenues ofdifferent 
organizations in the USA have been compared in last years and the highest 
share belonged to saving insitutions, whereas audit fees as a percentage of 
total revenue was the least in commercial banking.
To put in a nutshell, to intensify and strenghen the role o f audit 
companies in banking activities we m ust follow the following suggestions 
that are necessary to implement practically:
1) highlighting not only external audit, but also internal audit, because 
the latter one is also considered as a inspection commission in meaning;
2) supporting people to have a special certificate and increasing demand 
for audit profession;
3) setting up partnership with international audit organisations, 
committees and exchanging specialists for a long and good relationship.
To conclude, the role o f Audit in our banking system must be 
consolidated by international standards and should deserve to advise other 
countries as well.