How does internal audit support risk management?

How does internal audit support risk management?

• A. By providing independent assurance on the design and operating effectiveness of controls and risk management processes.
• B. By reporting only to external regulators.
• C. By setting the risk appetite for the organization.
• D. By implementing all risk controls directly.

Answer: (A)

Internal audit provides independent assurance on the design and operating effectiveness of controls and risk management processes. By evaluating how risks are identified, assessed, and monitored, and by testing that the controls aimed at mitigating those risks actually work, internal audit offers objective evidence to the board and senior management about whether risk management is effective. This helps identify gaps, weaknesses, and areas for improvement, guiding remediation and strengthening governance over risk. It isn’t responsible for setting the organization’s risk appetite or for implementing controls—that remains with management—and it doesn’t report solely to external regulators.

Internal audit provides independent assurance on the design and operating effectiveness of controls and risk management processes. By evaluating how risks are identified, assessed, and monitored, and by testing that the controls aimed at mitigating those risks actually work, internal audit offers objective evidence to the board and senior management about whether risk management is effective. This helps identify gaps, weaknesses, and areas for improvement, guiding remediation and strengthening governance over risk. It isn’t responsible for setting the organization’s risk appetite or for implementing controls—that remains with management—and it doesn’t report solely to external regulators.