Towards a Proactive Role of Internal Auditors in Anti-Money Laundry Compliance Review: An Egyptian Perspective

Abstract

The banking sector is crucial to any financial sector's stability and prosperous. But Money laundering (ML) threatens such stability through its vicious consequences. Thus, the need for a solid and rigorous AML programs emerged. In the light of the drastic evolution of the business environment over the last decades to rely heavily on information technology (IT), The new role for internal auditors (IAs) needed to convoy such evolution by advancing from traditional and reactive role to a more proactive and strategic role. No study has closely investigated the impact of IAs involvement in IT governance on IAs effectiveness in AML compliance review. A survey was developed based on the prior literature and was administered IAs in the Egyptian Banking sector. In all, 39 usable questionnaires were received. Smart partial least square was used to analyse the responses, the results indicated that IAs involvement in IT governance structures and relational capabilities significantly affected the IAs effectiveness. But IT involvement in processes was found to be insignificant. The overall results should be useful to banks in general, seeking to utilize the IAs to the full their aptitude in combating ML through improving the IAs effectiveness in AML compliance review.

Keywords: IT governance, AML compliance review, Internal Auditors