How often do you as a manager manage risks revolving around your decisions? More often are the times we don’t manage or even identify risks surrounding us. For a business to succeed one has to plan ahead and plan properly. However, often we plan without addressing questions like what is risk management? What are the risk management plans do I have for the business? Where can I get information or risk management services?
To steer a business to market leadership one has keep reviewing his past, present and the future. In best practice and especially for medium and large companies, managers find it necessary developing a business risk appraisal function to address all factors that would limit achievement of set objectives. This is most often done through an internal audit department or sometimes in big organizations a dedicated team to address business risks.
But what is risk management really? Business experts define it as a process, effected by an entity’s management and applied as a strategy across the organization to identify potential events that may prevent the entity achieving its objectives.
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Internal audit basics
Internal audit has continuously evolved over the years and now plays a major role in business management. To understand this function it is best to first enrich ourselves with some basics on how it wo
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Internal audit plan
Internal audit plan starts from the establishment of the internal audit department in an organisation. Establishing an internal audit department can be a daunting task.....
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Internal Audit process
Internal audit process is the process of executing the specific assignment audit plan and making various considerations with an aim of appraising a business process or whole business at large...
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What is enterprise risk management ?
enterprise risk management is a process, effected by an entity management and other personnel, identify potential events that may challenge the entity objectives.
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Why risk management
The overriding objective for implementing enterprise risk management is to provide reasonable assurance to an entity management and board that the entity business objectives are achieved.
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Business continuity management
Business continuity management is the development of strategies, plans and actions that provide business protection against interruptions.
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Ideal internal auditors team
Strong internal auditors team have different skills, ranging from specialized industry and technical knowledge to seasoned business acumen that may include advanced degrees in business, finance.....
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Internal audit human resources needs
For a company’s processes appraisal function to be effective internal audit human resources should be adequately equipped with certain specific skills and qualities.....
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What is internal audit ?
Internal audit is defined as an independent, objective assurance and consulting activity designed to add value and improve an organization’s operations....
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Internal audit standards
audit standards
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Internal Auditors Certification
Internal auditors have no strict requirement for certification, The IIA standards however, require technical competence and training that can be demonstrated by various certifications, depending upon
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The role of external auditors
External auditors are hired by and report to a company’s audit committee. Their historical objective has been to express an opinion on the fair presentation of the company financial staments.
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The auditor independence
The term ‘independent’ and the concept of auditor independence are often referred to in connection with both internal and external auditors. However, there is considerably different meaning and degree
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Fraud audit responsibility for internal auditors
Internal auditors must have sufficient knowledge to evaluate the risk in a fraud audit and how its managed by the organization, but..
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University programs
The number of formal internal audit university programs is increasing. The IIA encourages and supports the implementation of internal audit curricula at the collegiate level
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Audit human resource needs
Internal audit human resource must be resourced adequately to ensure an effective evaluation and testing of internal controls, associated risks and execution of the internal audit plan....
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Audit performance
Audit performance is the activity of carrying out audit procedures to collect audit evidence. Once a company forms an internal audit function, completes the risk assessment process and develops...
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it audit checklist
While specific skills are required for IT, IT audit checklist may differ by industry and an entity’s applications, there are a number of technology..
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Internal audit report content
A well-written internal audit report is a highly effective tool for management, the audit committee and the process owners affected by the report to bring about positive change and to improve controls
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Audit performance measures
Like any function or process within an organization, appropriately developed audit performance measures help to drive results, performance, quality and continuous improvement.
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Internal audit software
Internal audit software provide an organized, efficient approach to completing and documenting internal audits. The software often allows team members to share and review work papers at any time.
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The audit opinion
An audit opinion should by the Chief audit executive (CAE) to the senior management and the board to communicate an overall judgment about the organization risk management process.
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Integrated audit
A good way to think about an integrated audit is that it encourages a holistic approach to the internal audit process
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Continuous monitoring process
The IIA defines continuous monitoring as the process that management puts in place to ensure that policies, procedures and business processes are operating effectively.
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Corporate governance
Internal auditors are part of the foundation on which effective corporate governance is built.
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Compliance audit
Internal audit should be involved with a company compliance audit efforts since compliance with applicable laws and regulations is an integral part of COSO definition of internal control.
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Audit quality review
The IIA Standards require an internal audit quality assessment review once every five years.
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Enterprise risk management and other risk management approaches
Traditional risk management approaches are focused on protecting the tangible assets reported on a company balance sheet and the related contractual rights and obligations.
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Protecting enterprise value
Directors and CEOs face many challenges in protecting enterprise value. They must focus their organizations to capitalize on emerging opportunities.
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Risk management model
Under traditional risk management model, the process is fragmented, risk is viewed as a negative, reactive and ad hoc behavior is accepted, and the risk management activity is transaction oriented.
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Risk management process
There are steps that any organization can take in risk management process.
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ERM implementation
ERM implementation has been carried out by few companies, as defined by COSO. For example, the COSO definition makes clear that application of ERM must be across the enterprise at every level and unit
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ERM process implementation time period.
ERM process like business initiatives has discrete activities with clear objectives and well-defined timetables. ERM process is certainly more than a project.
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Successful companies position on ERM
We would expect that successful companies are applying many aspects of ERM infrastructure. It is to succeed without identifying, formally assessing, responding to, controlling and monitoring risks.
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COSO framework
COSO framework project was conducted by PricewaterhouseCoopers (PwC). PwC obtained input from a broad range of executives; chief executive officers, chief financial officers, chief risk officers,
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ERM framework
Like its internal control counterpart, the ERM framework is presented in the form of a three-dimensional matrix. The matrix includes four categories of objectives.
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COSO erm application
COSO ERM application is done across the enterprise. This can be accomplished, however, within a specific unit, subsidiary or division.
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Business continuity system
Organizations typically provide leadership to the business continuity system through three roles
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How business continuity team can gain management buy-in
For business continuity team to be effective it must obtain a buy in from management and other stakeholders. Most organizations successfully obtain management buy-in through following methods.
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Business continuity justifications
There are many business continuity justifications that can be used to buy in stakeholders in setting up business continuity program. These are regulatory requirements, audit findings
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Business continuity program
Why would a business invest in business continuity program? Stakeholder protection, past experiences, regulatory concerns and corporate image make up the majority of reasons given.
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Business continuity policy elements
A growing number of organizations rely on a formal, documented business continuity policy to drive the business continuity program.
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Business continuity recovery strategy options
When recommending possible response and business continuity recovery strategy options to a business continuity steering committee, information comes from two sources.
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Business continuity plan
A business continuity plan should focus on the specific content necessary to enable effective response and recovery activities.
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Hot site contracts considerations with a third-party
Although industry trends indicate organizations are bringing recovery solutions in-house, hot site contracts remain prevalent.
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Business risk assessment approaches
Most risk management disciplines utilize a risk assessment to identify and prioritize threats, risks and failure scenarios. Within BCM, a wide variety of risk management processes are used
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Business continuity training and awareness
Business continuity training and awareness are often used interchangeably but actually represent different levels of involvement as they relate to business continuity.
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Business budgeting
Business budgeting is an exercise that all accountants undertake on an annual basis and which forms an integral part of any successful business planning.
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Developing a capital structure
Capital structure theory emphasize on the balance between debt and equity. Due to tax debt is considered a cheaper method of capitalization than equity however its risky to leverage excessively.
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Capital budgeting
Capital budgeting often sends financial managers in a swirl before they decide what decision to make of the several investment options at their disposal.
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Cash Management
Business cash management concerns cash collections, controlling disbursements, covering shortfalls forecasting cash needs, investing idle funds and compensating the banks that support these activities
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