Governance, Risk, and Control Knowledge Elements
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This document discusses key concepts in governance, risk management, and internal controls including: - The role of internal auditing in evaluating risk management and governance processes - Components of enterprise risk management and the COSO framework - Types of internal controls and the responsibility of management and auditors - Governance structures and the role of internal auditing in ensuring effective governance
Governance, Risk, and Control Knowledge Elements
- 1. Governance, risk, and Control Knowledge ElementsIyadMourtada, CIA, CMA, CFEwww.OpenThinkingAcademy.com
- 2. Internal Auditing “Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve an organization's operations. It helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control, and governance processes. ” The Institute of Internal Auditors
- 4. RiskThe possibility of an event occurring that will have an impact on the achievement of objectives. Risk is measured in terms of impact and likelihood.
- 6. Risk ManagementA process to identify, assess, manage, and control potential events or situations to provide reasonable assurance regarding the achievement of the organization’s objectives. Responsibility of Senior Management
- 7. Implemented by Operation Management
- 8. Evaluated by Internal Audit Activity
- 9. Oversightedby Board or Audit Committee
- 10. Risk Management Responsibility of Senior Management
- 11. Implemented by Operation Management
- 12. Evaluated by Internal Audit Activity
- 13. Oversightedby Board or Audit Committee Impact vs. ProbabilityHighHigh RiskMedium RiskIMPACTShare/TransferMitigate & ControlMedium RiskLow RiskControlAccept (Mointor)LowHighPROBABILITY
- 14. ControlAny action taken by management, the board, and other parties to manage risk and increase the likelihood that established objectives and goals will be achieved. Management plans, organizes, and directs the performance of sufficient actions to provide reasonable assurance that objectives and goals will be achieved.
- 15. COSO (Committee of Sponsoring Organizations)
- 16. Control Environment Integrity and ethical values.
- 17. Management’s philosophy and operating style.
- 19. Assignment of authority and responsibility.
- 20. Human resource policies and practices.
- 21. Competence of personnel.Categories of Internal Control Effectiveness and efficiency of operations
- 22. Reliability of financial reporting
- 23. Compliance with applicable laws and regulationsCOSO ERM
- 25. Responsibility Core internal auditing roles in regard to ERM • Giving assurance on risk management processes.• Giving assurance that risks are correctly evaluated.• Evaluating risk management processes.• Evaluating the reporting of key risks.• Reviewing the management of key risks.
- 27. Which of the following is generally considered one of the main reasons why internal auditors evaluate the effectiveness of their company's internal control structure?To determine whether all risks and exposures of the company have been either reduced or eliminated.To determine whether the established internal controls are functioning as intended by management. To determine the extent of reliance the internal auditors can place on the controls in the process of evaluating the financial statements.To reduce the amount of detailed testing for their external auditors.
- 28. Which of the following is generally considered one of the main reasons why internal auditors evaluate the effectiveness of their company's internal control structure?To determine whether all risks and exposures of the company have been either reduced or eliminated.To determine whether the established internal controls are functioning as intended by management. To determine the extent of reliance the internal auditors can place on the controls in the process of evaluating the financial statements.To reduce the amount of detailed testing for their external auditors.
- 29. Control Self-AssessmentControl self- assessment (CSA) is a useful and efficient approach for managers and internal auditors to collaborate in assessing and evaluating control procedures.The three primary forms of CSA programs are: Facilitated team workshops
- 30. Surveys
- 31. Management- produced analysis. GovernanceThe combination of processes and structures implemented by the board to inform, direct, manage, and monitor the activities of the organization toward the achievement of its objectives.
- 32. Internal auditing roles in regard to GovernanceImproving the governance process in its accomplishment of the following objectives (IIA Standard 2130):Promoting appropriate ethics and values within the organizationEnsuring effective organizational performance management and accountabilityEffectively communicating risk and control information to appropriate areas of the organizationEffectively coordinating the activities of and communicating information among the board, external and internal auditors, and managementEvaluate the design, implementation, and effectiveness of the organization’s ethics-related objectives, programs, and activities
- 34. Fraud Any illegal act characterized by deceit, concealment, or violation of trust. These acts are not dependent upon the threat of violence or physical force. Frauds are perpetrated by parties and organizations to: obtain money, property, or services
- 35. avoid payment or loss of services
- 36. secure personal or business advantageWhich of the following represents the best governance structure?
- 37. Which of the following represents the best governance structure?
- 38. IyadMourtada, CMA, CIA, CFE, CPLP, M.A.iyad.mourtada@gmail.com http://ae.linkedin.com/in/iyadmourtadahttp://twitter.com/iyadmourtadahttp://www.youtube.com/Iyadmourtadahttp://www.iyadmourtada.comhttp://www.facebook.com/iyad.mourtadaiyadmourtadawww.openthinkingacademy.com
Editor's Notes
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