The Ministry of Finance hosts workshop on internal audit and the risk assessment process

The workshop addressed the concept of internal audit - an independent, impartial and affirmative advisory activity that aims at development and adds assists in achieving corporate goals. It has a clear methodology for the development and evaluation of the risk management and control systems, as well as the mechanisms of internal control and governance.

In addition it serves the internal audit system and corporate governance through the development and evaluation of follow-up goals and strategies. It applies risk assessment through following-up and developing the risk management system efficiency. It is linked with the activity, computer systems and control procedures. The third service addresses the internal control procedures, evaluating and developing the level of reliability of various activity data and measures the effectiveness of their performance and asset preserving procedures.

Introducing the workshop, HE Ahmed Al Hammadi, Executive Director of the Joint Internal Audit, Ministry of Finance, said:

"We continue to raise awareness about the importance of internal audit for federal government agencies, so that the internal audit is an integral part of any functional system. There are several procedures to be strictly followed by the supervisors of the internal audit in order to achieve the goal of the process."

His Excellency, Ahmed Al Hammadi said, "Risk management is how to deal with future events or facts that may lead to impede achieving the objectives of the ministries and governmental bodies. The main goal of the risk management is to reach a clear strategy and a specific methodology to identify threats to achieving objectives. Risk management does not mean to completely overcome it, but to help senior management to limit the risks and establish a mechanism to deal with the expected effects."

He added, "The workshop is a start of a series of workshops which will be provided by the joint internal audit and its strategic partner, KPMG, to federal ministries to spread the culture of the Internal Audit in the Federal Government. These workshops also play a significant role in building public awareness of risk management, the most important global trend in running leading institutions. It is a call for Federal bodies to coordinate with this sector to set up such workshops in the future."

The Internal Audit covers several parts, including technical or operational audit. It looks to effective use of economic resources, and ensures achievement of defined objectives and financial auditing. It checks the credibility of the financial and accounting procedures. In addition to information systems audit, it reviews the financial and accounting information systems to control and assess its compatibility with policies and internal control procedures.

The internal audit systems saw four stages of development since 1980, starting with the stage of supervision audit and understanding of the processes and procedures in conformity with the legislation. The second phase came after 1980, where the audit depended on the supervision framework, risk identification and corrective action, in addition to the audit of the operational and financial procedures, and its compliance with legislation. In the third phase, after 1990, the auditing process improved to be an auditing on the basis of risk.

And after 2000, the fourth stage came, where the audit started to work on the basis of risk management, comprehensive development, common understanding of the activities used and all the business risks of all types, in addition to auditing the activities focusing on each operational session separately, and identify the supervision type that must be followed.

The workshop discussed the concept of risk as an incident likely to affect the organization's ability to achieve operational or strategic objectives. The risks may be internal or external, as they include the risk of missed opportunities. The objective of the risk assessment process is to define the management style and the best way to identify and assess risks that hinder achieving the fundamental objectives of the business, and to effectively address the challenges and risks faced by the institution to achieve the desired objectives through applying a sophisticated approach in risk management in accordance with the world leading practices.

The risk assessment also helps the governmental bodies achieving the strategic goals on the highest degree of efficiency and effectiveness, as the audit process focuses on the most affecting risks that face the activities of the ministries and bodies.