In the ever-evolving landscape of risk and change , the role of internal audit is critical . Internal audit serves as an independent , objective assurance and consultant . It is designed to identify current and evolving risks . It suggests internal controls and processes to mitigate risk , while identifying opportunities for improvements and efficiencies to business practices and operations . If conducted successfully , internal audit can add great value to an institution and improve not only its day-to-day operations , but also its corporate governance .
Factors of Internal Audit Success
By Eileen Iles , CPA , CGMA , CIA , CFSA , CCSA , CRMA , MsAcc Shareholder , Financial Institutions Group
In the ever-evolving landscape of risk and change , the role of internal audit is critical . Internal audit serves as an independent , objective assurance and consultant . It is designed to identify current and evolving risks . It suggests internal controls and processes to mitigate risk , while identifying opportunities for improvements and efficiencies to business practices and operations . If conducted successfully , internal audit can add great value to an institution and improve not only its day-to-day operations , but also its corporate governance .
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Practice Risk-Based Internal Audit
Beyond compliance testing , risk-based internal audit focuses on understanding current processes , risks and controls within the institution . It helps assess the relevance , significance , changes and evolution of risks , and aligns internal audit plans accordingly . Risk-based internal audit evaluates the design of internal controls and identifies gaps or areas requiring additional controls .
Internal auditors should prioritize areas posing the greatest risks to the institution aligned with a risk assessment .
The population of risks include :
• Operations
• Fraud
• Market
• Liquidity
• Interest rate
• Information technology
• Compliance
• Strategic risks By identifying and assessing relevant risks , internal audit can tailor their procedures and testing to focus on the specific processes , procedures , risks and controls enhancing the value of the results and feedback .
8 VIEWpoint Issue 2 | 2023