08/31/2021

Operations
Auditing
Concepts

Enterprise Risk Management

 Enterprise Risk Management is a process, effected by an entity’s
Board of Directors, management and other personnel, applied in
strategy setting and across the enterprise that is designed to identify
potential events that may affect the entity, manage risks to be within
its risk appetite, and provide reasonable assurance regarding the
achievement of entity objectives.

 The company’s enterprise risk management framework should

include activities, such as, the identification, sourcing, measurement,
evaluation, mitigation and monitoring of risk.

 Moreover, PLCs are recommended to have a separate risk

management function headed by a Chief Risk Officer (CRO), subject
to the Principle of Proportionality.

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Risk-based (internal) auditing

IIA defines risk based internal auditing (RBIA) as

a methodology that links internal auditing to an
organization's overall risk management
framework. RBIA allows internal audit to provide
assurance to the board that risk management
processes are managing risks effectively, in
relation to the risk appetite.

Operational Auditing Defined

Systematic process

Evaluating an organization’s operations

Effectiveness, efficiency, and economy of

operations

Reporting to appropriate persons

Recommendations for improvement

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Phases of an Operational Audit

Select Auditee

Plan Audit

Perform Audit

Report Findings

Perform Followup

Financial Statements Audit vs.

Operational Audits

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Top General Competencies of Internal Auditor

1. Communication skills, such as oral, written, report writing, and
presentation skills
2. Problem identification and solution skills, such as conceptual and
analytical thinking
3. Ability to promote the value of internal audit
4. Knowledge of industry, regulatory, and standards changes
5. Organization skills
6. Conflict resolution/negotiation skills
7. Staff training and development
8. Accounting frameworks, tools, and techniques
9. Change management skills
10. IT/CT* framework, tools, and techniques
11. Cultural fluency and foreign language skills

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Behavioral skills an Internal Auditor

must possess
◾ Confidentiality ◾ Relationship building
◾ Objectivity ◾ Work independently
◾ Communication ◾ Team building
◾ Judgment ◾ Leadership
◾ Work well with all ◾ Influence
management levels ◾ Facilitation
◾ Possess governance ◾ Staff management
and ethics sensitivity
◾ Change catalyst skills
◾ Be team players

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Thank you!

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