The Impact of Risk-Based Internal Audit Approach on Improving Risk Management Processes: A Field Study in Yemeni Islamic Banks (Aden)

Abstract

This study explores the impact of the Risk-Based Internal Audit approach on improving risk management processes in Yemeni Islamic banks in Aden. The study focuses on four core RBIA functions: early identification, risk assessment, control evaluation, and monitoring and reporting. Data from eight banks were analyzed using SPSS, linear regression, and ANOVA. In light of the study's results, there is a statistically significant impact of the risk-based internal audit approach in improving risk management processes in Islamic banks operating in Aden by 51.3%. According to the results, the control evaluation function ranked first in influencing the improvement of risk management processes with a rate of 45.2%, followed by risk assessment at 39.9%, and early detection at 32.2%. The study suggests that the management of Yemeni Islamic banks should take into account the recommendations and reports submitted by the Internal Audit Department regarding risk management activities and processes and proposals for improvement, in addition to the need for the management of Yemeni Islamic banks to support and develop communication systems between them and the Internal Audit Department to facilitate the exchange of necessary information on time, to support the monitoring and reporting function, which had the lowest impact rate of 24.3%.