Internal Audit and Risk Advisory

Internal Audit

Internal Audit is an independent management function, which involves a continuous and critical appraisal of the functioning of an entity with a view to suggest improvements thereto and add value to and strengthen the overall governance mechanism of the entity, including the entity's strategic risk management and internal control system.

Facets of Internal Audit

• Internal auditor should be independent of the activities they audit.
• Internal auditor plays an important role in providing assurance to management on the effectiveness of risk management.
• Internal auditor’s role should be a dynamic one, continually changing to meet the needs of the organisation. There is often a need to change audit plans as circumstances warrant. 
• It contributes to accomplishment of objectives and goals of the organisation through ethical and effective governance.
• Internal audit is in a unique position to identify potentially fraudulent situations during the course of audit and, thus, plays a strong role in preventing fraud and other illegal acts.

Risk Advisory

“Risk is a choice rather than a fate”. 

Risk arises on account of uncertainty of occurrence and unknown consequences. The degree of uncertainty or likelihood of occurrence and impact of the risk outcome combined together forms the magnitude of the risk. 

Risk management enables management to effectively deal with risk, associated uncertainty and enhancing the capacity to build value to the entity or enterprise and its stakeholders.

Risk advisors choose the risk well. They look at External and Internal Risks in broad context. They do research activities such as risk assessment for current company affairs or risk evaluation, which evaluates the company's handling of risks in the past. In-depth knowledge of the company and industry is very important for risk advisors.

Risk Advisory is all about “Identifying, Measuring and Managing Organizational Risk for improving Organizational Performance”.

Risk Advisors must be able to present their findings to their clients in a way that's easy for the company administration to understand and implement.

Responsibility of Risk Advisors: 

• Identify financial, safety or security risks that the client company or organization may face;
• Prepare action plans to decrease risk factors;
• Perform risk evaluation;
• Provide training and certification for organization staff so that they can be aware of risks and try to avoid them;

Conclusion:

As of today, internal audit undeniably is the backbone of a sound Corporate Governance System. Internal audit is a management function, thus, it has the high-level objective of serving management's needs through constructive recommendations in areas such as, internal control, risk, utilisation of resources, compliance with laws, management information system, etc.