IIA Understanding Risk Management Frameworks

Life is full of uncertainty. If you stop to think about it, there are many day-to-day activities about which you simply do not know what the outcome will be in advance. How you deal with those uncertainties determines what kind of success you will have in life. Operating a business is no different. Organizations face uncertainties in all aspects of conducting business, and their success is dependent on how well they manage those uncertainties. Internal auditing can be a key enabler to that success. Risk management is depicted as the middle layer in the governance structure. Risk management is intended to identify and mitigate the risks that may adversely affect the organization’s success and exploit the opportunities that enable that success. Management develops strategies regarding how to best manage the key risks and opportunities. Risk management activities should operate within the overall direction of the governance structure. This course from the Institute of Internal Auditors (IIA) describes risk management in detail, discussing key risk management elements and principles, as well as the various roles and responsibilities. Other illustrations will be provided to depict, in greater detail, how one might envision the key elements of risk management. The course ends with discussions about how the internal audit function can play an integral role in risk management. The specific roles of the internal audit function are discussed, as is the impact risk management may have on the internal audit plan.