In an environment of growing business risk, internal audit has become a key support vehicle for change and the business transformation journey.
At MBG, we drive innovation and business growth acting as a valuable business partner in conducting risk assessment and internal audit. As a renowned Internal Auditor , we combine the skills of our talents with a multi-vertical collaborative approach and a 360-degree view of the processes, supporting our clients on all stages of their growth. We bring in industry specific experience and regulatory knowledge and expertise , and combine our efforts with Technology, Data Analytics, Tax, Legal and other service lines to bring value addition to our clients. Our solutions are valuable, aligned, and agile. Our internal audit services provide the highest level of insight and quality, helping you act faster and building confidence to act decisively and remain focused on your core business.
We provide tailor-made solutions to your unique business needs, whatever your business model.
Risk Assessment: Correctly Evaluating Likelihood and Impact of Risk
Risk assessment lies at the foundation of risk management strategies and practices. A risk assessment identifies, analyzes, and evaluates the potential exposures to risks that have an adverse impact on the organization and identifies the acceptable level of tolerance for those events. It then lays down the steps necessary to remove or reduce their impact.
The risk assessment process typically proceeds along the following steps :
Sound risk assessment achieves several important tasks such as:
Mitigation Control: Measures to Effectively Remove or Reduce Risk
The purpose of mitigation controls is to remove or reduce the likelihood and impact of risk. These controls are allotted for specific threats as identified during risk assessment. The internal audit must assess which risks are relevant for the specific area or process that is being audited and which control approaches and measures must be used to manage them.
Risk mitigation controls broadly revolve around the following four types :
The type/s of control strategies used should be thoroughly evaluated and vetted by a experienced internal auditor or equivalent competent authority with regard to the selected plan’s sufficiency in mitigating the risks. It should be properly documented with clearly stated objectives, risks, current versus proposed controls, etc.
The Internal Audit Plan: Ensuring Correct Implementation
Given the centrality of internal audits in risk management, planning is critical for audit effectiveness. The company’s risk assessment determines the key areas of focus for the internal audit, and these priorities are reflected in the internal audit plan.
The internal audit plan ensures that the process is carried out smoothly, aligning the company’s risk assessment with effective mitigation measures, and reflecting its overall goals and objectives. The plan lays down the scope and methodology of the internal audit work as well as its resourcing needs, specific auditing tools and procedures such as inventory audit procedures, etc., and audit quality parameters. The internal audit plan considers all relevant factors covering the business, market, economic and regulatory landscape. It reviews current internal controls and risks, trends in operations, financials, laws, and regulations, as well as other emerging trends that can impact the risk environment and the company’s exposure to it.
Data Analytics: Tool for More Effective and Efficient Internal Audits
The use of advanced data analytics in Internal Audit services such as ours helps dig deeper and explore different areas of your business, providing root cause analyses supporting decision-making and helping establish an efficient and controlled framework strengthening the foundation.
Data analytics delivers significant performance uplift and value-add increases the credibility of Internal Audits with stakeholders. It also improves Internal Audit quality by automating the process and provides management with optimal operational assurance.
A key benefit of data analytics is the comprehensiveness of audit and the elimination of sample testing it enables. This leads to more accurate audits and greater assurance to organizational management.
Data analytics also helps improve audit efficiency by processing large volumes of data within a limited timeframe. An unprecedented level of efficiency level can be achieved by allowing analytics to focus on low-value and transactional activities while auditors focus on items that demand human intervention. Automation of repetitive time-consuming tasks helps Internal Auditors establish more controls and improve adherence to standards and guidelines.
Data analytics also helps detect hidden patterns and anomalies. It enables internal auditors to identify risks more effectively and improve internal controls. Conducting real-time risk assessment and continuous auditing helps in improving risk management.
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