Strengthening financial-sector assurance in reform-driven markets
Strengthening financial-sector assurance in reform-driven markets
The role of external audit, stress testing and regulatory compliance
Dr. Jamal Altaraireh
Financial Consulting Partner, BDO Jordan
Financial institutions across the region are operating in increasingly complex regulatory environments. Banks, central banks, fintech companies and financial-sector stakeholders are expected to demonstrate stronger governance, reliable financial reporting, effective risk management and greater transparency.
In this context, external audit is no longer viewed only as a statutory requirement. It is becoming an important assurance mechanism that supports confidence among investors, creditors, and other stakeholders (external users) in boards and management (as responsible parties). When combined with regulatory compliance, governance and sustainability reviews and financial-sector advisory, external audit can help institutions identify weaknesses, strengthen controls and improve resilience, as well as enhancing decision-making effectiveness among users/stakeholders.
For banks in particular, financial assurance must be connected to operational realities. Financial reporting, credit risk, liquidity, capital adequacy, compliance, AML/CFT, internal controls and governance cannot be reviewed in isolation. A strong financial institution needs reliable numbers, but it also needs systems, processes and controls that support those numbers.
Why this matters
Financial institutions are under pressure to demonstrate that they are financially sound, properly governed and able to respond to stress. Regulators increasingly expect banks to maintain credible financial statements, effective internal controls, sound risk-assessment processes and transparent reporting.
This is particularly important in reform-driven markets, where financial institutions may be managing rapid regulatory change, technology transformation, evolving customer expectations and increased scrutiny from local and international stakeholders.
Banks and financial institutions that invest early in assurance readiness are better positioned to:
Practical checklist for financial institutions
1. Financial reporting and audit readiness
Financial institutions should ensure that accounting records, supporting documents, reconciliations and financial statements are prepared in a timely, accurate and complete manner.
Key questions include:
2. Governance and oversight
Strong governance is central to financial-sector assurance. Boards and audit committees should have clear visibility over financial reporting, internal controls, risk management and regulatory compliance.
Institutions should review whether:
3. Internal controls over financial reporting
External audit outcomes are directly affected by the strength of internal controls. Weak controls increase the risk of misstatements, delays, adjustments and regulatory concerns.
Priority areas include:
4. Stress testing and financial resilience
Stress testing helps banks assess how their financial position may respond to adverse conditions. It supports management decision-making in relation to capital, liquidity, credit risk and operational continuity.
Banks should consider:
5. Regulatory compliance and supervisory expectations
Financial institutions should maintain a structured approach to regulatory compliance, including ownership, documentation, reporting and remediation.
Key areas include:
6. Fraud risk and forensic awareness
Fraud risk remains a significant concern for financial institutions. Internal controls, audit procedures and governance oversight should be able to detect and respond to unusual transactions, control overrides and misconduct indicators.
Institutions should assess:
7. Remediation and management action plans
Internal audit, stress testing and compliance reviews are only effective when findings are translated into practical remediation.
Each finding should include:
Key takeaways
External audit, stress testing and regulatory metrics are a confidence mechanism.
How BDO Jordan can help
BDO Jordan supports banks, central banks, fintech companies and financial institutions with audit, assurance and advisory services tailored to regulatory and financial-sector requirements.
We help clients with:
About the author
Dr. Jamal Altaraireh is a Financial Consulting Partner at BDO Jordan with more than 35 years of experience in accounting, financial management, external audit, internal audit, IFRS conversion, IPSAS implementation, financial SOPs, business planning and financial feasibility studies.
He previously worked as Senior Auditor / Expert at the Audit Bureau of Jordan, Inspector at the Central Bank of Jordan and Supervisor in the Internal Audit Department at Bank of Jordan, where he led several fraud investigations. He also served as instructor and Head of the Accounting Division at the University of Petra.
Dr. Jamal holds a Ph.D. in Accounting from Amman Arab University, and Master’s and Bachelor’s degrees in Accounting from the University of Jordan. He also holds JCPA, CBA and IPSAS certifications.
Dr. Jamal Altaraireh
Financial Consulting Partner, BDO Jordan
Financial institutions across the region are operating in increasingly complex regulatory environments. Banks, central banks, fintech companies and financial-sector stakeholders are expected to demonstrate stronger governance, reliable financial reporting, effective risk management and greater transparency.
In this context, external audit is no longer viewed only as a statutory requirement. It is becoming an important assurance mechanism that supports confidence among investors, creditors, and other stakeholders (external users) in boards and management (as responsible parties). When combined with regulatory compliance, governance and sustainability reviews and financial-sector advisory, external audit can help institutions identify weaknesses, strengthen controls and improve resilience, as well as enhancing decision-making effectiveness among users/stakeholders.
For banks in particular, financial assurance must be connected to operational realities. Financial reporting, credit risk, liquidity, capital adequacy, compliance, AML/CFT, internal controls and governance cannot be reviewed in isolation. A strong financial institution needs reliable numbers, but it also needs systems, processes and controls that support those numbers.
Why this matters
Financial institutions are under pressure to demonstrate that they are financially sound, properly governed and able to respond to stress. Regulators increasingly expect banks to maintain credible financial statements, effective internal controls, sound risk-assessment processes and transparent reporting.
This is particularly important in reform-driven markets, where financial institutions may be managing rapid regulatory change, technology transformation, evolving customer expectations and increased scrutiny from local and international stakeholders.
Banks and financial institutions that invest early in assurance readiness are better positioned to:
- Meet statutory and regulatory audit requirements;
- Improve financial-reporting reliability;
- Strengthen board and management oversight;
- Enhance internal control effectiveness;
- Assess resilience through stress testing;
- Support AML/CFT and compliance expectations;
- Build trust with regulators, shareholders and stakeholders;
- Identify remediation priorities before issues escalate.
Practical checklist for financial institutions
1. Financial reporting and audit readiness
Financial institutions should ensure that accounting records, supporting documents, reconciliations and financial statements are prepared in a timely, accurate and complete manner.
Key questions include:
- Are financial statements supported by reliable accounting records and documents?
- Are proper accounting policies in place?
- Are reconciliations reviewed and approved?
- Are accounting estimates properly documented?
- Are IFRS requirements correctly applied?
- Are material judgments reviewed by management and governance bodies?
- Are prior-year audit findings tracked and resolved?
2. Governance and oversight
Strong governance is central to financial-sector assurance. Boards and audit committees should have clear visibility over financial reporting, internal controls, risk management and regulatory compliance.
Institutions should review whether:
- Board and committee roles are clearly defined;
- Audit committee reporting is timely and complete;
- Key financial and risk matters are escalated appropriately;
- Internal audit findings are monitored to closure
- Management action plans are realistic and tracked;
- Governance records provide evidence of oversight.
3. Internal controls over financial reporting
External audit outcomes are directly affected by the strength of internal controls. Weak controls increase the risk of misstatements, delays, adjustments and regulatory concerns.
Priority areas include:
- Reconciliations;
- Authorization controls;
- Segregation of duties;
- Journal entry and dual controls;
- Account ownership;
- Financial close procedures;
- Evidence retention;
- Exception reporting.
4. Stress testing and financial resilience
Stress testing helps banks assess how their financial position may respond to adverse conditions. It supports management decision-making in relation to capital, liquidity, credit risk and operational continuity.
Banks should consider:
- Stress scenarios relevant to their operating environment;
- Credit portfolio sensitivity;
- Liquidity pressure;
- Capital adequacy impact;
- Profitability and cash-flow implications;
- Management response plans;
- Reporting to regulators and governance bodies.
5. Regulatory compliance and supervisory expectations
Financial institutions should maintain a structured approach to regulatory compliance, including ownership, documentation, reporting and remediation.
Key areas include:
- Statutory audit requirements;
- Central bank reporting;
- AML/CFT compliance;
- Prudential reporting;
- Financial disclosures;
- Governance requirements;
- Regulatory correspondence and follow-up.
6. Fraud risk and forensic awareness
Fraud risk remains a significant concern for financial institutions. Internal controls, audit procedures and governance oversight should be able to detect and respond to unusual transactions, control overrides and misconduct indicators.
Institutions should assess:
- Fraud-risk governance;
- Whistleblowing channels;
- Investigation protocols;
- Related-party transaction controls;
- Unusual journal entries;
- Management override risks;
- Documentation and evidence requirements.
7. Remediation and management action plans
Internal audit, stress testing and compliance reviews are only effective when findings are translated into practical remediation.
Each finding should include:
- Risk rating;
- Root cause;
- Responsible owner;
- Action plan;
- Target date;
- Implementation evidence;
- Progress reporting;
- Closure validation.
Key takeaways
External audit, stress testing and regulatory metrics are a confidence mechanism.
- Audit supports statutory compliance, but it also strengthens trust in financial reporting, governance and institutional accountability.
- Stress testing supports better decision-making.
- Stress testing helps banks understand resilience under adverse conditions and supports capital, liquidity and risk-management planning.
- Controls must operate, not only exist.
- Financial institutions need evidence that controls are implemented, reviewed and monitored.
- Regulatory readiness requires structure.
- Clear ownership, documentation and follow-up are essential for managing supervisory expectations.
- Remediation is the real value.
How BDO Jordan can help
BDO Jordan supports banks, central banks, fintech companies and financial institutions with audit, assurance and advisory services tailored to regulatory and financial-sector requirements.
We help clients with:
- External audit and statutory assurance;
- Financial reporting and IFRS advisory;
- Stress testing support;
- Internal control reviews;
- Regulatory compliance support;
- AML/CFT framework and risk-assessment support;
- Forensic accounting and fraud-risk reviews;
- Financial-sector mapping and market studies;
- Bank mergers and acquisitions;
- Business plans and feasibility studies;
- Remediation planning and implementation follow-up;
- Audit committee and management reporting.
About the author
Dr. Jamal Altaraireh is a Financial Consulting Partner at BDO Jordan with more than 35 years of experience in accounting, financial management, external audit, internal audit, IFRS conversion, IPSAS implementation, financial SOPs, business planning and financial feasibility studies.
He previously worked as Senior Auditor / Expert at the Audit Bureau of Jordan, Inspector at the Central Bank of Jordan and Supervisor in the Internal Audit Department at Bank of Jordan, where he led several fraud investigations. He also served as instructor and Head of the Accounting Division at the University of Petra.
Dr. Jamal holds a Ph.D. in Accounting from Amman Arab University, and Master’s and Bachelor’s degrees in Accounting from the University of Jordan. He also holds JCPA, CBA and IPSAS certifications.