In my last post, I discussed “What Should Auditors Audit?” My answer was that internal audit should address the risks that matter to the organization, its board, and executive management team:
“All risks that could affect the achievement of corporate goals, including unstated objectives such as compliance and safety, are prioritized and the top ones considered for inclusion in the audit plan.”
I also explained that, “When internal auditors provide insight and even foresight on the risks that matter, their work matters to the board and top …
Now there’s a sentence I have heard many, many times! I believe this assumption comes from the association that risk management equals management of compliance risks, which applies mostly to regulated companies or public companies.
As we’ve already discussed many times in these blogs, this is a misconception – compliance risks only compose one risk category that deserves to be managed. It certainly doesn’t define a complete risk management scope.
All companies manage risks since they’re inherent to any production or service delivery activity. For instance, small and medium enterprises (SMEs) might manage:
Treasury risks: suppliers and employees aren’t …
The Art of Speed: 2009
About five years ago, I was sitting beside a pool in Palm Springs while on a winter vacation when my phone rang. It was one of my credit card providers calling to tell me my credit card had been stolen. That’s right, they were telling me – not asking me.
They explained that over the previous four days, my card had been used at a college bookstore and a college pub, and several other places I had not ever frequented, even though I routinely traveled around the world on business. The expenditures were modest, probably …
Whenever I talk to customers that decide to embark on a risk management project, and wherever they are in the world, one question always kick starts the conversation: So, where do I start?
As a matter of fact, when writing this post, I was kicking myself: Why didn’t I start my blog postings with this topic first? I should have indeed, and I do apologize that it comes so late. It seems that we all want to see the results of a project and invite people to the house warming party before we even lay its foundations…
For all risk …
In the past, auditors were famous for finding problems. They audited a process, business unit, or location and found “weaknesses” in internal control. These were then prioritized based on the auditors’ assessment of the risk they represented.
These days, leading internal audit teams are moving from this idea of auditing controls, sometimes called controls assurance, to auditing whether management’s processes, systems, and organization (which include controls) provide reasonable assurance that risks are at acceptable levels.
They are moving from controls assurance to risk assurance.
They are also moving from auditing the past (hindsight) to providing insight on current activities and …
I was sitting in my backyard yesterday, which overlooks a golf course in Anthem, Arizona, and my mind was wandering as I thought about the topic for my next blog. Just for the fun of it, I thought about some key aspects of golf that might be applicable to governance, risk, and compliance. If you are a golfer, you’ve probably heard some of this before—but I’m guessing you’ve never heard this applied to GRC.
Perhaps the US Golf Association (USGA) says it best in an excerpt from The Human Element:
“Golf is …
During a recent breakfast event, I was having a coffee with two security managers who were in charge of business continuity for their organizations: one was from the IT department and the other one was a business operations manager.
The questions of our debate revolved around were: Who should be the most significant contributor to business continuity activities and should continuity management be a separate activity?
Interestingly, we all agreed that we saw more and more business continuity management reaching outside IT domain where it historically focused on IT disaster recovery planning and information security to a more business-process …
My Fictional Day Begins…. By Carla
After I drag myself out of bed and finish my morning ablutions, I sit down with coffee and cereal to read the latest Federal Register followed by Compliance Today and a few industry publications. I make notes as I go of any regulation changes relevant to my job. You see, the company is extremely interested in avoiding compliance risk—and to be honest, it makes my work life miserable.
Oh, pardon me, I should introduce myself. I am Carla Franco, a working manager of a purchasing team within a large global enterprise. I can’t …
A number of years ago, while living near Houston, Texas and working for a major oil company as an audit director, I joined the local volunteer fire department in my community.
As a new member, I was assigned the task of carrying out a fire inspection at our local middle school. I was part of a team that included more highly-trained fellow volunteers.
Auditing Fire Risks
Being an experienced auditor, I was certain I was up to the task. I knew all about controls and I thought that knowledge would come in handy. My plans were to meet up …
Who’s responsible for ensuring that corrective actions to remedy issues identified by internal audit are completed?
Management is responsible for the system of internal control as well as for managing risk.Management is responsible for correcting deficiencies either in controls or in the management of risk, whoever identified them.
So why does internal audit, more often than not, monitor completion of these actions? Why should they be the ones that report progress to the audit committee and executive management?
Internal audit certainly has an interest in seeing these actions taken. Not only does it mean that their recommendations for change …