5 key areas of risk.

• Author: Heffes, Ellen M.
• Position: INTERNAL AUDIT - Brief article

Following roundtable discussions earlier this year--in the midst of the financial crisis--The Institute of Internal Auditors Research Foundation (IIARF) identified five key areas of risk that organizations are facing. The resulting report, Knowledge Alert, What's Next for Internal Auditing, examines how chief audit executives are addressing these risks:

* Credit risks. Key risks identified include those related to the loan process, incomplete or inaccurate credit risk analyses and credit control issues. Organizations are monitoring the financial processes and business areas most impacted by credit risks, as well as identifying what, where and how credit risks are affecting their organization's bottom line.

* Cost/expense reduction and containment risks. Key risks identified in this area are the presence of weaker controls, lack of control oversight and lack of segregation of duty controls.

* Exposure to distressed third parties. Most chief risk executives are increasing their internal audit activity's focus on risks related to third parties in distress.

Specific activities include...