Abstract
Recent developments in the global financial system have made financial transparency and effective oversight of bank performance more essential than ever. This research examines the impact of independent auditing on financial transparency and performance of international banks, particularly HSBC and UBS. The results of this study show that increased auditing costs have improved financial transparency and reduced operational risks in these banks. The comparison of these two banks revealed that alignment with international accounting and auditing standards (such as IFRS and ISA) has contributed to increased investor confidence and improved financial reporting quality. Notably, after HSBC's money laundering scandals and UBS’s merger with Credit Suisse, stricter audit oversight was implemented, leading to positive effects on financial transparency and a reduction in financial misconduct.
This paper uses a panel data regression model and various statistical tests to analyze the effects of auditing costs on the financial performance of these two banks over the 2010-2024 period. The findings indicate that independent auditing not only enhances financial transparency for banks but also strengthens economic stability and financial performance by improving oversight and reducing financial corruption.
It is recommended that banks effectively manage their auditing costs and align with international auditing standards to reduce financial risks and enhance financial transparency