How can banks perform an effective internal audit?

Regularly reviewing compliance processes is crucial for banks to conduct an effective internal audit. This ongoing review ensures that the bank's operations align with established laws, regulations, and internal policies. It allows compliance officers and auditors to identify areas where the bank may be falling short or failing to adhere to required standards.

By systematically analyzing compliance processes, banks can spot weaknesses or gaps that may pose risks, thus enabling timely corrective actions to be taken. Such proactive measures not only help in maintaining regulatory compliance but also enhance the overall efficiency and integrity of banking operations. Furthermore, these reviews foster a culture of continuous improvement and accountability within the organization, ensuring that compliance is not merely a one-time effort but an integral part of the bank's operations.

Other options, while they may contribute to the audit process in some way, do not provide the comprehensive and systematic approach that regular reviews of compliance processes demand for effective internal auditing.