SavedAdd your journal

Journals / Ufuk Üniversitesi Sosyal Bilimler Enstitüsü Dergisi / 2026 / Cilt: 15 Sayı: 29

THE INSTITUTIONAL CAUSES OF BANK FAILURES: INTERNAL CONTROL, INTERNAL AUDIT, AND ACCOUNTING ETHICS IN THE U.S. (2008–2025)

BANKA BATIŞLARININ KURUMSAL NEDENLERİ: ABD ÖRNEĞİNDE İÇ KONTROL, İÇ DENETİM VE MUHASEBE ETİĞİ (2008–2025)

Adalet Hazar(Başkent Üniversitesi)0000-0002-1483-8360
Şenol Babuşcu(BAŞKENT ÜNİVERSİTESİ)0000-0003-2870-6358
Pages
117–133
Publication Date
2026-06-30
🏛️Bibliographic metadata and full text access for this article are provided via DergiPark.
DergiPark Record ↗
✨

AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

The findings indicate that similar institutional vulnerabilities have recurred across different periods despite post-crisis regulatory reforms.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:This study examines bank failures in the United States during the 2008–2025 period not only through macroeconomic factors such as interest rate hikes and liquidity shocks, but also within the framework of weaknesses in internal control, internal audit, and accounting ethics.
📊
Key Findings & Data:A qualitative case analysis based on FDIC and FDIC-OIG reports and regulatory reviews shows that, in many cases, bank failures were accelerated by weak control environments, ineffective risk assessment, limited independence of internal audit functions, and ethical violations.
💡
Conclusion & Impact:The findings indicate that similar institutional vulnerabilities have recurred across different periods despite post-crisis regulatory reforms.
🔬Design:Review & Systematic Survey
📍Scope:2008–2025 Verileri
⚙️Variables:Banka Batışları · İç kontrol ve İç denetim · Muhasebe Etiği

Abstract

This study examines bank failures in the United States during the 2008–2025 period not only through macroeconomic factors such as interest rate hikes and liquidity shocks, but also within the framework of weaknesses in internal control, internal audit, and accounting ethics. A qualitative case analysis based on FDIC and FDIC-OIG reports and regulatory reviews shows that, in many cases, bank failures were accelerated by weak control environments, ineffective risk assessment, limited independence of internal audit functions, and ethical violations. The findings indicate that similar institutional vulnerabilities have recurred across different periods despite post-crisis regulatory reforms. The study recommends the simultaneous sharing of internal audit reports with regulators, strengthening ethical compliance through certification and continuous training, adopting a continuous monitoring approach in auditing, and expanding the scope of internal control to cover sustainability reporting.

Özet

Bu çalışma, 2008–2025 döneminde ABD’de gerçekleşen banka batışlarını yalnızca faiz artışları ve likidite şokları gibi makroekonomik faktörlerle değil; iç kontrol, iç denetim ve muhasebe etiği zayıflıkları çerçevesinde ele almaktadır. FDIC ve FDIC-OIG raporları ile düzenleyici incelemelere dayalı nitel vaka analizi, banka başarısızlıklarının birçok vakada zayıf kontrol ortamı, etkisiz risk değerlendirmesi, iç denetimin sınırlı bağımsızlığı ve etik ihlaller nedeniyle hızlandığını göstermektedir. Bulgular, kriz sonrası reformlara rağmen benzer kurumsal kırılganlıkların farklı dönemlerde tekrarlandığını ortaya koymaktadır. Çalışma; iç denetim raporlarının düzenleyicilerle eş zamanlı paylaşılması, etik uyumun sertifikasyon ve sürekli eğitimle güçlendirilmesi, denetimde sürekli izleme yaklaşımının benimsenmesi ve iç kontrolün sürdürülebilirlik raporlamasını da kapsayacak biçimde genişletilmesini önermektedir.

🔖

Cite This Article

Hazar, A., Babuşcu, Ş. (2026). THE INSTITUTIONAL CAUSES OF BANK FAILURES: INTERNAL CONTROL, INTERNAL AUDIT, AND ACCOUNTING ETHICS IN THE U.S. (2008–2025). Ufuk Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, Cilt: 15 Sayı: 29, 117–133. https://doi.org/10.58635/ufuksbedergi.1877958

📄 Full Text PDF Viewer

📄

PDF görüntüleyici hazırlanıyor...

References (48)

  1. Ashbaugh-Skaife, H., Collins, D. W., & Kinney, W. R. (2007). The discovery and reporting of internal control deficiencies prior to SOX-mandated audits. Journal of Accounting and Economics, 44(1–2), 166–192.
  2. Bank for International Settlements. (2023). BIS Quarterly Review, December 2023: International banking and financial market developments. https://www.bis.org/publ/qtrpdf/r_qt2312.htm
  3. Basel Committee on Banking Supervision. (2015). Corporate governance principles for banks. Bank for International Settlements. https://www.bis.org/bcbs/publ/d328.htm
  4. Berger, A. N., Imbierowicz, B., & Rauch, C. (2016). The roles of corporate governance in bank failures during the recent financial crisis. Journal of Money, Credit and Banking, 48(4), 729–770.
  5. Congressional Research Service. (2017, April 21). The Dodd-Frank Wall Street Reform and Consumer Protection Act (R41350). https://www.congress.gov/crs-product/R41350
  6. Congressional Research Service. (2023, December 15). Enhanced prudential regulation of large banks (R47876). https://www.congress.gov/crs-product/R47876
  7. COSO. (2013). Internal Control—Integrated Framework. Committee of Sponsoring Organizations of the Treadway Commission. https://www.coso.org/Pages/ic.aspx
  8. COSO. (n.d.). Achieving Effective Internal Control Over Sustainability Reporting (ICSR): Building Trust and Confidence through the COSO Internal Control—Integrated Framework. https://www.coso.org/_files/ugd/3059fc_a3a66be7a48c47e1a285cef0b1f64c92.pdf
  9. Dechow, P., Ge, W., & Schrand, C. (2010). Understanding earnings quality: A review of the proxies, their determinants and their consequences. Journal of Accounting and Economics, 50(2–3), 344–401. https://doi.org/10.1016/j.jacceco.2010.09.001
  10. DeFond, M., & Zhang, J. (2014). A review of archival auditing research. Journal of Accounting and Economics, 58(2–3), 275–326. https://doi.org/10.1016/j.jacceco.2014.09.002
  11. Doyle, J., Ge, W., & McVay, S. (2007). Determinants of weaknesses in internal control over financial reporting. Journal of Accounting and Economics, 44(1–2), 193–223.
  12. Erkens, D. H., Hung, M., & Matos, P. (2012). Corporate governance in the 2007–2008 financial crisis: Evidence from financial institutions worldwide. Journal of Corporate Finance, 18(2), 389–411.
  13. FDIC (2008a). Failed Bank Information for IndyMac Bank. https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/indymac.html
  14. FDIC (2008b). Failed Bank Information for Washington Mutual Bank. https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/wamu.html
  15. FDIC (2009). Failed Bank Information for Colonial Bank. https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/colonial-al.html
  16. FDIC (2010). Failed Bank Information for Florida Community Bank. https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/floridacommunity.html
  17. FDIC (2011). Failed Bank Information for First Southern National Bank. https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/firstsouthern-ga.html
  18. FDIC (2015). Failed Bank Information for Doral Bank. https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/doral.html
  19. FDIC (2017). Failed bank information: Guaranty Bank (Milwaukee, WI). (FDIC Failed Bank List / Failed Bank Information pages). https://www.fdic.gov/bank-failures/failed-bank-list
  20. FDIC (2018). Purchase & Assumption Agreement for First CornerStone Bank. https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/firstcornerstone.html
  21. FDIC (2020). Failed bank information: Almena State Bank (Almena, KS). (FDIC Failed Bank List / Failed Bank Information pages). https://www.fdic.gov/bank-failures/failed-bank-list
  22. FDIC (2021). Failed Bank Review: Almena State Bank (FBR-21-003). https://www.fdicoig.gov/sites/default/files/reports/2022-08/FBR-21-003.pdf
  23. FDIC (2024a). Resolution/receivership information: Republic First Bank dba Republic Bank (Philadelphia, PA). (FDIC bank failures pages). https://www.fdic.gov/bank-failures
  24. FDIC (2025). Failed bank information: Pulaski Savings Bank (Chicago, IL). (FDIC Failed Bank List / Failed Bank Information pages). https://www.fdic.gov/bank-failures/failed-bank-list
  25. FDIC (2025). Failed bank information: The Santa Anna National Bank (Santa Anna, TX). https://www.fdic.gov/bank-failures/failed-bank-list/santa-anna-national-bank
  26. FDIC (n.d.). Failed Bank List. https://www.fdic.gov/bank-failures/failed-bank-list
  27. FDIC Office of Inspector General. (2024b). Material Loss Review of Republic First Bank (EVAL-25-01). https://www.fdicoig.gov/sites/default/files/reports/2024-11/EVAL-2025-01%20Material%20Loss%20Review%20of%20Republic%20First%20Bank.pdf
  28. FDIC Office of Inspector General. (2025). Failed Bank Review: Pulaski Savings Bank (REV-25-02). (FDIC OIG bank failures report page; PDF erişimi FDIC OIG üzerinde). https://www.fdicoig.gov/reports-publications/bank-failures
  29. Federal Reserve. (2023). Review of the Federal Reserve’s Supervision and Regulation of Silicon Valley Bank. https://www.federalreserve.gov/publications/review-of-the-federal-reserves-supervision-and-regulation-of-silicon-valley-bank.htm
  30. Federal Reserve. (2025). Dodd-Frank Act Stress Tests 2025. https://www.federalreserve.gov/supervisionreg/dfa-stress-tests-2025.htm
  31. Federal Reserve. (n.d.). Resolution plans (living wills). https://www.federalreserve.gov/supervisionreg/resolution-plans.htm
  32. FloQast. (2024). What you need to know about the COSO ERM framework. https://www.floqast.com/blog/coso-erm-framwork-risk-management-excellence
  33. Gennaioli, N., Shleifer, A., & Vishny, R. (2018). A crisis of beliefs. Princeton University Press.
  34. Goh, B. W. (2009). Audit committees, boards of directors, and remediation of material weaknesses in internal control. Contemporary Accounting Research, 26(2), 549–579.
  35. Healy, P. M., & Wahlen, J. M. (1999). A review of the earnings management literature and its implications for standard setting. Accounting Horizons, 13(4), 365–383. https://doi.org/10.2308/acch.1999.13.4.365
  36. Hoitash, U., Hoitash, R., & Bedard, J. C. (2009). Corporate governance and internal control over financial reporting: A comparison of regulatory regimes. The Accounting Review, 84(3), 839–867.
  37. IESBA. (2022). Handbook of the International Code of Ethics for Professional Accountants. International Ethics Standards Board for Accountants. https://www.ethicsboard.org/publications/2022-handbook-international-code-ethics-professional-accountants
  38. IESBA. (2025). Final pronouncement: International Ethics Standards for Sustainability Assurance (including International Independence Standards) and related revisions to the Code. https://www.ethicsboard.org/publications/final-pronouncement-international-ethics-standards-sustainability-assurance-including-international
  39. IIA. (2020). International Professional Practices Framework (IPPF). The Institute of Internal Auditors. https://www.theiia.org/en/standards/
  40. Krishnan, J. (2005). Audit committee quality and internal control: An empirical analysis. The Accounting Review, 80(2), 649–675.
  41. Laeven, L., & Levine, R. (2009). Bank governance, regulation and risk taking. Journal of Financial Economics, 93(2), 259–275.
  42. New York State Department of Financial Services. (2023). Internal review of the supervision and closure of Signature Bank. https://www.dfs.ny.gov/system/files/documents/2023/04/nydfs_internal_review_rpt_signature_bank_20230428.pdf
  43. Office of the Comptroller of the Currency. (2024). Cybersecurity and financial system resilience report 2024. https://www.occ.treas.gov/publications-and-resources/publications/cybersecurity-and-financial-system-resilience/files/pub-2024-cybersecurity-report.pdf
  44. Office of the Comptroller of the Currency. (2025a). OCC appoints receiver for The Santa Anna National Bank, Santa Anna, Texas (NR 2025-62). https://www.occ.gov/news-issuances/news-releases/2025/nr-occ-2025-62.html
  45. Office of the Comptroller of the Currency. (2025b). Model risk management: Clarification for community banks (Bulletin 2025-26). https://www.occ.gov/news-issuances/bulletins/2025/bulletin-2025-26.html
  46. Pathan, S. (2009). Strong boards, CEO power and bank risk-taking. Journal of Banking & Finance, 33(7), 1340–1350.
  47. Tomasic, R. (2010). Corporate governance failure: The role of internal and external gatekeepers in UK banks and financial institutions. Corporate Governance: The International Journal of Business in Society, 10(1), 1-18. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1658509
  48. Zhang, Y., Zhou, J., & Zhou, N. (2007). Audit committee quality, auditor independence, and internal control weaknesses. Journal of Accounting and Public Policy, 26(3), 300–327.