The Internal Audit of the Central Bank of Malta functions under the direct responsibility of the Bank’s Board of Directors. The mandate of Internal Audit is defined in its Internal Audit Charter approved by the Board of Directors. The Charter is established on the basis of professional international standards, in particular those of the Institute of Internal Auditors (IIA). Internal Audit operates an independent and objective assurance and consultancy function designed to add value and improve the Bank’s operations. It helps the Bank accomplish its objectives through a systematic and disciplined approach designed to evaluate and improve the effectiveness of the risk management, control and governance processes including the efficient use of the Bank’s resources. Internal Audit provides reasonable assurances to the senior management and, through the Audit Committee, to the Board of Directors on the adequacy and effectiveness of the Bank’s operational and control framework.

The internal control structure of the Bank is based on a functional approach. Each Division is responsible for its own internal control and efficiency. To ensure this, the business units implement a set of operational control procedures and policies within their area of responsibility.

In addition to these controls, Risk Assessment Office, which operates independently from Internal Audit, endeavours to promote a strong risk management culture throughout the organisation. Using several initiatives, Risk Assessment Office focuses on the identification, assessment and mitigation of risks, thus protecting the Bank’s assets and resources. The Office ensures that all business areas have in place sound policies and operational procedures as a primary means to mitigate risk; that critical operations have business continuity plans in place and are prepared to deal with uncertainties; that information assets are safeguarded through the implementation of an effective Information Security Management programme; and that risks are brought to the attention of management and the Board of Directors through a systematic mapping of all risks across the Bank’s business processes.