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Business Risk Vs Audit Risk

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What’s the disparity between business risk and audit risk?

Business risk relates mainly to an organization’s goals and objectives. It is essentially the would-be cost incurred if the business does not achieve its strategic plans. The evaluation and management of business risk has developed into  enterprise risk management (ERM) in many organizations.

On the other hand, audit risk relates mainly to the internal and external audit efforts to achieve its objectives; that is, provide effective, timely, and efficient assurance and risk mitigation to management and the board. Traditionally, audit risk has been seen as strictly the risk of incorrect audit conclusions. Contemporary views, however, include big-picture audit risks; specifically, that the internal audit function is not working correctly or there is a fault in the methodology.

Business Risk (a.k.a. Enterprise Risk)

Enterprise Risk Management (ERM) is defined by COSO as:

  • A process, affected by an entity’s board of directors, management, and other personal, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives.
  • ERM is a structured and coordinated entity-wide governance approach to identify, quantify, respond to, and monitor the consequences of potential events. When implemented by management, ERM is generally evaluated by internal auditors for effectiveness and efficiency.
  • Business risk is fundamentally the risk of an organization not achieving its objectives. A formal ERM program both enables the management of business risk and provides assurance to management and the board that risk is given due consideration in day-to-day business decisions.
 

Why hire a consultant ?

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Why Hire a consultant?


In support of effective strategy development, management consultants are the best people to bring on board for they share with you your vision and dedication. An ideal consultant should directly work with you to bring in not just common but best in scholarly and industry understanding in order to find solutions to your problems.

More and more businesses battle between finding time to keep up with changing trends and markets in the midst of growing, significantly less time being spent on trying to mature. The consequence of this is that some businesses fall deeply into debt, succumb to unprecedented or mismanaged risks, or even end up with a disappointing show of results to initiatives that had been intended to yield ultimate performance.

It is  an all too common but overlooked scenario to find a business facing a downward trend in profits, new markets, overall efficiencies and the business has or is treading on thin ice yet no internal structures seem to work. When your work or business becomes your life over your livelihood, you defiantly need a new set of eyes.

"a fresh pair of eyes"

 

 

White papers

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whitepapers  ACL Datalink

 
 

Audit Management

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White paper- Audit Management 

 
 

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