The role of internal audit in the risk management process: A developing economy perspective

Abstract

Companies in developing economies have faced a myriad of risks. Many of them due to external related party exposures and the potential risks of associated contagion. The function of Internal Audit (IA) has emerged as a significant governance mechanism in the management of risk in developing countries. This exploratory study sought to identify the role of IA across the developing economy of Barbados. Based upon the results of an online survey administered to the Barbados chapter of the Institute of Internal Auditors (IIA), the paper examines IA involvement in the risk management process (RMP) of several types of companies. Findings reveal that IA is critical to the RMP and that it needs to be enhanced through improved risk education, exposure, and training, along with increased support from Audit Committee and Senior Management. The generalizability of the conclusions is however limited since the sample was drawn from a developing country. The paper adds to the existing literature as it highlights the challenges of IA as it develops in a developing economy while also dealing with their integration into the RM framework. Practical key takeaway from the paper suggests that (a) RM and the IAF are in a developmental stage primarily due to the need for increased exposure and understanding of international risks and best practices. This is especially since most companies maintain extensive international ties and are highly susceptible to contagion. (b) For an integrated RM system to be successful, the management of risk must be owned at all levels throughout the organization and not just at the Board of Directors and Executive Management, and (c) improved communication of roles and accountabilities especially for IA should be instituted to ensure proper diffusion of risk culture within the organization.

Sustainability performance measurement in risk and uncertainty management: An analysis of base of the pyramid supply chain literature

“…The SSCPM literature includes several performance measurements tools as well as specific performance measures, often regarded as control and monitoring tools (Laihonen & Pekkola, 2016; Selviaridis & Norrman, 2014), which could be beneficial for the management of risk (Seuring & Müller, 2008; Weekes‐Marshall, 2020), for example, such as environmental benchmarking, social reporting, and financial auditing. These performance tools and measures are the part of performance measurement systems and are frequently discussed in the performance management literature (Arzu & Erman, 2010; Grosvold et al, 2014).…”

“…Further, integration of PMS in the risk management process can be found in other management domains such as “finance” (e.g., Weekes‐Marshall, 2020). However, the SCM researchers identify the combined importance of risk and performance management in SC and call for more research in this regard (e.g., Akwei & Zhang, 2018; Samson & Gloet, 2018).…”

Intelligent Assessment Method of Enterprise Tax Risk Based on Deep Learning

“…Among them, the failure state probability set of enterprise tax risk intelligent assessment is P n = ðP 1 , P 2 ,⋯,P n Þ, and the enterprise tax risk department and reasons are marked according to the duration of enterprise tax repair risk state. By matching the newly added enterprise tax risk information to build a risk review mechanism [24], the enterprise tax risk intelligent assessment risk information is cleaned and the repeated risk characteristics are eliminated. Let the value range of failure probability of enterprise tax be Q i ∈ ½0, 1, and normalize the enterprise tax risk intelligent evaluation index within the value range of duration T 1 .…”

Internal Audit of Cybercrimes in Information Technologies of Enterprises Accounting

“…The authors demonstrate that the competence of the internal audit makes the operational efficiency of the firm better, but the interrelation between the independence of the internal audit and the operational efficiency of the firm is insignificant. D. Weekes-Marshall [11] investigated the role of the internal audit in the process of risks management of the countries, being developed. T. Bondarenko, R. Dutchak, O. Kondratiuk, O. Rudenko, A. Shaikan and E. Shubenko [12] grounded the perspective reality of the internal audit for the solvation of conflicts in accounting of the enterprise with the help of the tools of the artificial intellect (artificial neuron networks and machine training).…”