improve the effectiveness of risk management, control, and governance processes. ” as we see it, the basic function of internal audit is independent appraisal of an institution ’ s internal controls, including controls over financial reporting. simply put, it is about reviewing activities to ensure that they are carried out as intended. of course, a by - product of internal audit will be recommendations on internal control and process improvements that could be made, an important role for internal audit at large and complex financial institutions in particular. the bank of png internal audit charter was drawn up with the assistance from the imf technical advisor and reviewed periodically – by the internal audit department ; it was approved by senior management ( governor ) and subsequently confirmed by the board of directors as part of its oversight role. in the charter, the bank ’ s senior management gives the internal audit department the right of initiative and authorises it to have direct access to and communicate with any member of staff, to examine any activity or entity of the bank, as well as to access any records, files or data of the bank, including management information and the minutes of all consultative and decision - making bodies, whenever relevant to the performance of its assignments. the charter states the terms and conditions according to which the internal audit department can be called upon to provide consulting or advisory services or to carry out other special tasks and the charter is communicated throughout the organisation. to perform their role effectively, internal audit requires organizational independence from management to enable unrestricted evaluation of management activities and personnel. to ensure independence, manager internal audit reports directly to the governor and also has direct access to the audit committee on matters considered of significant importance to the functioning of the bpng. audit committees require the help of internal auditing departments in order for them to be able to effectively fulfill their obligations to the board, the shareholders, and other outside parties who have a stake in the organisation. the contribution of internal auditors as business advisors or consultants to the organisation and their role in ensuring compliance with various statutes, policies and procedures cannot be overemphasized. these new challenges that are faced by internal auditors require them to acquire the necessary skills and competencies on a continuous basis. this makes it necessary for them to place them on a learning path so that they could update themselves with new developments. he / she should know all aspects of the operations in order to perform an effective job as an internal auditor. in this respect, the work done by the institute of internal auditors in

financial intermediaries, public intervention is since last fall also aiming to support banks ’ financing and own funds. this is a significant shift. needless to say, restoring liquidity remains a pressing priority. inter - bank markets have shown gradual signs of improvements. yet, there is still some way to go. to this end, central banks have mobilised considerable ammunition. a process underway for over a year has culminated in the central banks having adjusted their operational frameworks in various areas. the maturity and currency of their facilities have been expanded. the range of eligible counterparties has been broadened. the tender procedures have been modified with a view to ensure unlimited amounts of central bank money. the list of collateral for refinancing has been widened. as for the eurosystem, they have been providing liquidity at a fixed rate for unlimited amount. enhanced international coordination between monetary authorities is ensuring that their actions are part of a consistent overall strategy. these measures are highly exceptional with indeed unprecedented monetary easing leading key policy rates to historically low levels and the adoption, in certain cases, of unorthodox monetary policy actions. as such, they should greatly contribute to restoring confidence and a smooth functioning of money markets. governments have moved aggressively to support banks'solvency and resilience. since the paris declaration by euro area member - countries, europe, under the leadership of france until year end, has been acting according to what i consider a sound and consistent action plan. i won ’ t enter into the details. just bear in mind the three following elements. first, authorities are extending guarantees to banks ’ refinancing so that they can, in turn, properly finance the economy. second, significant reforms of accounting rules are now being implemented. basically, these reforms allow banks to transfer instruments previously marked to market to portfolios where that will no longer be the case. they also provide for greater flexibility in methods used to value assets whose market has shut down. third, and lastly, governments have confirmed their willingness, when warranted, to step in and support banks ’ capital. what about france ’ s actions? government and parliament very quickly put meat on the bones of the european principles. a new bill has been passed, which provides for two things. first, it sets up a eur 320 billion funding vehicle to guarantee banks ’ medium - term refinancing ( i. e. up to five years ). this vehicle is strictly supervised by the french government and the banque