Considerations of the risk based internal audit
Author:
PhD. Alexandru RUSOVICI, Ec. Relu POPESCU
JEL:
DOI:
Keywords:
risk management, entity risk maturity, assessments and policies
Abstract:
Any action or lack of action poses a risk of not accomplishing the tasks. The risks can be acceptable only if the measures for their avoidance are justified from the ethical, professional or financial point of view, as case may be.\r\n\r\nThe material risks arise and develop mainly as a consequence of the causes that generates them, namely:\r\n• inadequate management of the relationships between the entity and the environments where it operates;\r\n• the leadership system is excessively centralized and lacks transparency;\r\n• inadequate professional training and inadequate inter-human relationships;\r\n\r\nAt the managerial level, there is established the obligation to create and maintain a internal control system very well organized, and the internal audit. This article intends to study in depth several issues related to the risk based internal audit considering The professional guidance for the internal auditors issued by the Internal Audit Institute from England and Ireland, recognized and recommended to the auditors by the International Internal Audit Institute. \r\n\r\nIn the article are presented the main issues related to the managerial obligation to establish and maintain an internal control system and to ensure good functioning of the internal audit by:\r\n• identifying the major risks which can affect the operation efficiency and effectiveness, rules and regulations observance, the trust in the financial information contained in the financial statements, assets protection etc.\r\n• defining the theoretical level admitted for the risk exposure;\r\n• assessing the hypothesis that the risk can be materialized and its impact coefficient;\r\n• risks monitoring and assessment, the level of internal control adequacy and internal audit functioning.\r\n