Risk Advisory

Internal Audit

Internal audit is an independent evaluation of an organization's processes, controls, and risks to ensure efficiency, accuracy, and compliance.

1. Risk Management: Ensure that all potential risks are identified and mitigated.
2. Compliance: Verify adherence to internal policies, laws, and regulations.
3. Operational Efficiency: Assess the effectiveness of business operations.
4. Fraud Detection & Prevention: Identify and address financial misstatements or fraudulent activities.

1. Operational Audit: Evaluates the efficiency and effectiveness of business operations.
2. Compliance Audit: Assesses adherence to regulations and internal policies.
3. Financial Audit: Examines the accuracy and reliability of financial statements.
4. IT Audit: Reviews information security, data protection, and IT governance.
5. Forensic Audit: Investigates financial fraud, embezzlement, or data breaches.

1. Planning: Define objectives, scope, and risk areas.
2. Fieldwork & Testing: Examine processes, test controls, and collect evidence.
3. Reporting: Document findings and provide recommendations for improvement.
4. Follow-Up: Ensure corrective actions are implemented effectively.

1. International Standards for the Professional Practice of Internal Auditing (IIA Standards)
2. COSO (Committee of Sponsoring Organizations) Framework
3. COBIT (Control Objectives for Information and Related Technologies)
4. ISO 27001 (Information Security Management)

Risk Assessment

Risk assessment is the process of identifying, analyzing, and prioritizing risks that could impact business objectives.

1. Risk Identification:

   Identify financial, operational, IT, regulatory, and cybersecurity risks.

   Use brainstorming, historical data analysis, and expert opinions.

2. Risk Analysis:

   Assess the likelihood and impact of each risk.

   Use Qualitative Risk Analysis (High/Medium/Low) or Quantitative Risk Analysis (monetary impact).

3. Risk Prioritization:

   Use a Risk Matrix (Likelihood vs. Impact) to classify risks.

   Focus on high-priority risks that require immediate mitigation.

4. Control Assessment:

   Identify existing controls and evaluate their effectiveness.

   Implement additional measures if current controls are inadequate.

5. Risk Mitigation Planning:

   Develop strategies to reduce, transfer, accept, or eliminate risks.

   Assign responsibilities and define response actions.

6. Monitoring & Continuous Improvement:

   Regularly review and update risk assessments based on new threats.

1. Operational Audit: Evaluates the efficiency and effectiveness of business operations.
2. SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats)
3. Failure Mode and Effects Analysis (FMEA): Evaluates failure points.
4. Bowtie Analysis: Visualizes risk scenarios.
5. Factor Analysis of Information Risk (FAIR Model): Quantifies IT risk.

1. GRC (Governance, Risk, and Compliance) Platforms: MetricStream, RSA Archer, LogicGate
2. Cyber Risk Assessment Tools: NIST Cybersecurity Framework, CIS Controls

Risk Management

Risk management is a continuous process of identifying, assessing, and mitigating risks to minimize negative impacts on business operations.

1. Risk Identification:

   Identify risks related to finance, operations, IT, cybersecurity, and compliance.

   Conduct risk workshops and stakeholder interviews.

2. Risk Analysis & Evaluation:

   Determine the severity of risks using risk matrices and financial modeling.

   Classify risks into low, medium, and high impact categories.

3. Risk Response Strategies:

   Avoidance: Eliminate activities that introduce risks.

   Reduction: Implement controls to reduce risk probability and impact.

   Sharing: Transfer risk through insurance or third-party contracts.

   Acceptance: Prepare contingency plans for unavoidable risks.

4. Implementation of Risk Controls:

   Design internal controls, security measures, and contingency plans.

   Monitor key risk indicators (KRIs) and develop response procedures

5. Continuous Monitoring & Reporting:

   Conduct regular audits and reviews to track risk changes.

   Generate reports for management and compliance purposes.

1. ISO 31000 (Risk Management Guidelines)
2. COSO ERM (Enterprise Risk Management Framework)
3. NIST 800-37 (Risk Management for IT Systems)
4. Basel III (Financial Risk Management for Banks)

1. SIEM (Security Information & Event Management) Tools: Splunk, IBM QRadar
2. Incident Response & Business Continuity Tools: ServiceNow, Everbridge
3. Regulatory Compliance & Risk Management Solutions: RSA Archer, MetricStream