THE ROLES OF INTERNAL AUDIT IN THE RISK MANAGEMENT

What is risk management?

• Enterprise risk management is that encompass a range of risk control activities by identify, assess, manage & control risks

• Enterprise risk management is an independent and objective assurance activity designed to add value and improve an organisation's operations.

• Enterprise risk management provides value to governing bodies and senior management as an objective source of independent advice.

• ERM identify & evaluate significant risk exposures & contribute - the improvement of risk management & control systems.

Internal audit is an....

• dependent and objective assurance activity designed to add value and improve an organisation's operations.

• control activities by identify, assess, manage & control risks.

• independent and objective assurance activity designed to add value and improve an organisation's operations.

• examine the reliability and integrity of financial and operational information.

The purpose of the internal audit activity can be described as :

• Providing additional assurance regarding fair presentation for financial statements

• Expressing an opinion on the adequate design and functioning of the system of internal control

• Adding value to the organisation

• Assuring the absence of any fraud that would materially affect the financial statements

In complying with The IA’s Code of Ethics, an internal auditor should....

• Respect and contribute to the objectives of the organization even if it is engaged in illegal activities

• Primarily apply the competency principle in establishing trust

• Go beyond the limitation of personal technical skills to advance the interest of the organization

• Use individual judgment in the application of the principles set forth in the Code

What is IA’s mission statement?

• To support and protect organization value by accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes

• To provide an independence, objective assurance and consulting activity designed to add value and improve customer operations

• To enhance and protect organizational value by providing risk-based and objective assurance, advise and insight

• To enhance and provide an independence value by providing risk-based and objective assurance, consulting activity and insight

How risk management can help organisations to manage their risks?

• Better oversight of risks programs and potential threats

• Allowing employees to prioritise risk mitigation actions

• Disabling consistent and full reporting of risks

• Discontinuous improvement of risk management programs

Internal controls can never be considered as absolutely effective because:

• not all organizations have internal audit departments

• controls are designed to prevent and detect only material misstatements

• internal controls prevent separation of duties

• their effectiveness is limited by the competency and dependability of employees

Which following is the the responsibilities of internal audit in risk management:

i. Evaluate risks,

ii. Review processes and procedures

iii. Reviewing project proposals

iv. Investigate fraud

• i, ii, and iv only

• All the above

• i, iii and iv only

• i, ii and iii only

An Internal Audit risk assessment is an evaluation of risks related to the value drivers of the organization, covering strategic, financial, operational, and compliance objectives.

• True

• False

In an organization, an internal auditor is appointed by....

• Shareholders

• Creditors

• Board of Directors

• Government