Wed. May 22nd, 2024

Both Audit Control and Enterprise Risk Management (ERM) process focus on the company’s risk factors and the functions of great risks importance, but these two often opt for different approaches. Enterprise Risk Management process directly-indirectly works for the businesses in order to understand, organize, access and report the risk factors occurred within the organization.

On the other hand, Auditing functions maintain and implement independent objectives to review and analyse the risk. It is necessary for the company to understand the potential risk factors and their prevention methods which can be done with the effective implication of internal auditing procedures. This function seeks a better understanding of areas of risk management and focuses on business to develop an adequate risk response if required. 

Creation of strong risk management practices and building an effective strategic relationship between internal audit and enterprise risk management. It is very crucial and essential to enhance collaboration between these two. Monitoring the risk and their factors relate controls are especially important to give the constant surety with a proper feedback connection between risk management factors and auditing functions. 

Areas In the Need of Alignment

  • ERM advisors help companies to develop and implicate risk management approaches and frameworks, whereas, Team of Internal control independently evaluate the risk management functions and effectiveness of the framework. 
  • ERM Teamwork on risk advice management and analyze the unmitigated risks, whereas Auditing team provide assurance base don companies’ capacity to identify and remediate unmitigated risks factors.
  • It is necessary for the ERM team to provide status on risk management priorities and audit its coverage. Auditing team needs to provide assurance on the scope and effectiveness of risk prioritization.
  • Audit control advisors can take advice from ERM committee and the team on risk reporting and on internal risk management reporting. Auditing team then makes a risk assessment report to study the impacts of those risk factors. 

Also ReadHolding Company Isn’t Always What You Think It Is

Why taking Advice from ERM & Auditing Advisor is so Important?

Here are the four ways that an organization can follow and  improve their ERM and Internal Auditing relationship

  • Measure Erm Risks With The Help of Auditing Process

Takin help from ERM and Auditing advisor can help you to show the new and right path for your business. They can provide the business with the review of the consolidated financial effort to maintain the risk from both ERM and auditing purposes. 

  • Conducting Co-risk Assessment Report

Internal auditing control advisor partners with ERM team and help the companies to ensure risk assessment factors by making the proper auditory report and by giving an effective flow of risk information. They can help you recognize discrepancies that might create negative impacts your financial report. 

  • Sharing Improvement Results

To keep you informed about risk environment and auditing functions, ERM and auditing team plays an important role. They share relevant information related to risk environmental changes and the implication of financial protocol required to be implicated to improve and disclose ideal facts and details. 

  • Coordinating with Board Members and Financial Executive Committee

ERM and Auditing prepare a report and present it to the executive committee for the final review of financial reporting and adjustments. A consistent message and information delivery to the board of the companies is essential to manage the maximum financial performance and value proportion. 

It is important because committee members will get the chance to review and evaluate the details prior to delivery it to the stakeholders who have an interest in knowing what is going on in the organization. So, the auditing team identify and remediate discrepancies and inconsistent facts to deliver right, accurate and final information with the stakeholders.

A simple review of auditing reports can give authenticate and relevant information related to the financial performance of the companies. Professional auditors and ERM team can evaluate and ensure collaboration between enterprise risk management and auditory reports both functions. Hiring a professional internal control team can help you assess the result for getting strong operational opportunities.

By Meets Patel

Meets Patel is a well-know business and tech advisor with the abilities to keep a track and predict the market trends with the utmost accuracy.

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