Risk Management and Internal Audit: Forging a Collaborative Alliance

Much has been written about the need for organizations to improve their risk management capability. The collapse of Enron the WorldCom scandal, the 2008 financial crisis, BPs Deepwater Horizon disaster and the European debt crisis have all been examples called out by regulators and news media evidencing the need for more inclusive, effective risk management practices and oversight. The IIA and RIMS believe that collaboration between the disciplines of internal audit and risk management, can lead to stronger risk practices in meeting stakeholder expectations. The two functions make a powerful team when they collaborate and leverage one another's resources, skill sets and experiences to build risk capabilities within their organizations. The adage, the sum is greater than the parts, certainly applies. And, it is clear that leading organizations have discovered efficiencies, better decision-making and improved results by forming strong alliances between the risk management and internal audit functions.