Understanding Risk-Based Auditing (Currently Unavailable)

Author: Lynn Fountain

The Institute of Internal Auditors 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 of the organization

Many internal audit groups attempt risk based auditing but find that some aspects are difficult to deploy within their own organizations. This occurs due to the lack of standard understanding of the various techniques used in risk based auditing and the true intent and advantages associated with the process. To be able to effectively develop a risk based auditing methodology and then to employ it within your organization, you must understand the premise behind the concept and the advantages and challenges it will bring. This course is designed to prepare the auditor to fully embrace the risk based methodology concept.

RBIA is at the cutting edge of internal audit practice. It is an area that is evolving rapidly and where there is still little consensus about the best way to implement it. Executing on true risk based internal auditing requires more than an annual risk assessment for the internal audit plan. It requires a pre-established methodology that includes defining the organization's risk appetite and risk tolerance utilizing measurements that include aspects of financial, compliance and operational metrics. In addition, internal audit must be ready to put aside their typical checklists and standard work programs. True risk based internal auditing goes far beyond setting the annual audit plan. It incorporates cascading the process through to each individual audit as well as the audit reporting process. This course focuses on understanding the concepts around risk based internal auditing and establishment of a framework or methodology for risk based auditing.

Publication Date: May 2020

Designed For
Organizational executives, Board members, Internal Auditors, and Chief Audit Executives.

Topics Covered

• Why Move to RBIA?
• Traditional vs. RBIA Approach
• Understanding the Risk Imperative
• RB Audit Plan
• Establishing a Methodology
• Applying the Methodology
• Risk Plotting
• Using Management in a RBIA
• Is Every Organization Ready for RBIA?

Learning Objectives

• Identify risk over the past decade plus
• Recognize how to examine the purpose for moving to risk based internal auditing
• Recognize how to compare the traditional internal audit approach vs. RBIA
• Identify the risk based imperative
• Identify how to move to a successful RBIA approach
• Recognize how to establish a RBIA methodology
• Recognize how to utilize management to develop the RBIA process
• Identify if your organization ready for RBIA

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Auditing (2 hours)

Program Prerequisites
None

Advance Preparation
None