Week 8 Blog

Risk Management Process

Since we are covering Risk Management in class this week, I chose to write something about understanding the Risk Management Process.

Internal auditors in an organization help identify the risks and the impact the risk can have on the organizations performance and processes. In addition to that, their job is to make sure there is enough security measures to safeguard the assets of an organization and ensure proper controls are in place to mitigate the threats. So having a risk management process helps an organization and their auditors to provide quality recommendations for the organizations needs and requirement regarding threats and risk before they happen.

Risk management is the identification, assessment and prioritization of risks (defined in ISO 31000 as the effect of uncertainty on objectives) followed by coordinated and economical application of resources to minimize, monitor and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities.  Every risk management process comes with certain objectives which the auditors should recommend the organizations to examine the best practices.  The main objective of risk management is to eliminate negative risks, reduce risks to an acceptable level and to transfer risks by means of insurance. Knowing yourself, knowing the enemy and accountability for risk management are some of the crucial topic for risk management. 

References:

http://en.wikipedia.org/wiki/Risk_management

https://iaonline.theiia.org/understanding-the-risk-management-process