As business environments become more complex, auditors must anticipate and focus closely on new and emerging varieties of risk. While often unpredictable, there are measures every auditor can take to mitigate their overall impact.
- Existing risks- Existing risks can be separated into two tiers. Tier 1 are those risks that auditors commonly perform assessments on - finance, compliance, reputation, technology, and fraud. When including tier 2 risks - operations, supply chain, infrastructure, knowledge, and competition – auditors will expand their knowledge base and be better prepared.
- Black Swan risk- Black swans are extraordinary events that are of high significance, high impact, and low probability, such as a global pandemic, political instability, or natural disasters. They also include the breakdown of technology that may disrupt an organization’s business practices –potentially over an extended period of time.
Find out more about the most important risks that internal auditors should be aware of.