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Risk Based Auditing – Establishing a Methodology

The Institute of Internal Auditors defines risk based internal auditing (RBIA) as a methodology that links internal auditing to an organization's overall risk management framework. RBIA allows internal audit to provide assurance to the board that risk management processes are managing risks effectively, in relation to the risk appetite.

RBIA is at the cutting edge of internal audit practice. It is an area that is evolving rapidly and where there is still little consensus about the best way to implement it.  Executing on true risk based internal auditing requires more than an annual risk assessment for the internal audit plan.  It requires a pre-established methodology that includes defining the organization's risk appetite and risk tolerance utilizing measurements that include aspects of financial, compliance and operational metrics.  In addition, internal audit must be ready to put aside their typical checklists and standard work programs.  True risk based internal auditing goes far beyond setting the annual audit plan.  It incorporates cascading the process through to each individual audit as well as the audit reporting process.

This course is the second of three risk based auditing courses.  This course focuses on the establishment of a framework or methodology for risk based auditing and examining how to utilize risk based questions within the process steps.  

Course Series

This course is included in the following series:

3 CoursesRisk Based Auditing

  1. Understanding Risk-Based Auditing
  2. Risk Based Auditing – Establishing a Methodology
  3. Risk Based Auditing – Applying the Methodology

Learning Objectives

  • Identify some of the various challenges internal audit may face when attempting to execute upon risk based auditing.
  • Explore alternatives to identifying risk appetite and risk tolerance to utilize within risk based auditing.
  • Evaluate the development and usage of a variety of risk management characteristics when identifying risk tolerance.
  • Explore sample scoring techniques to apply to risk based auditing.
  • Learn how to conclude your assessment for risk based auditing.
Last updated/reviewed: April 20, 2018

Included In Certifications

This course is included in the following Expert Certifications:

17 CoursesInternal Controls Certification

  1. Internal Controls: What Every Financial and Accounting Professional Needs to Know
  2. COSO 2013 Framework Requirements and Implementation Overview
  3. Applying the Standards for Internal Auditors in Line with Your Organization's Needs - Part One
  4. Applying the Standards for Internal Auditors in Line with Your Organization's Needs - Part Two: Managing Internal Audit and Nature of Work
  5. Applying the Standards for Internal Auditors in Line with Your Organization's Needs – Part Three: Executing the Audit Engagement
  6. Identifying and Implementing the Proper Balance of Internal Controls
  7. Proper Documentation Methods for Internal Audit and Internal Controls Processes
  8. Information Technology (IT) Risks in Emerging Business Environments
  9. Foundations for a Strong Internal Audit Department
  10. Keys to Managing an Effective Internal Audit Function
  11. Internal Audit: Keys to Building Effective Relationships with the Audit Committee
  12. Understanding Risk-Based Auditing
  13. Risk Based Auditing – Establishing a Methodology
  14. Risk Based Auditing – Applying the Methodology
  15. Segregation of Duties for Core Business Processes
  16. Keys To Maintaining Objectivity and Professional Skepticism
  17. When The Whistle Blows Part 2: Managing Whistleblower Hotlines

43 Reviews (156 ratings)Reviews

5
Anonymous Author
The course material was well-presented. The emphasis on the need for management's buy-in conveys the presenter's real-world knowledge: if the organization doesn't measure risk or understand the importance of thresholds, it is difficult to measure/classify the impact of control failures. Great course for thos interested in learning about RBA.
5
Member's Profile
This course details the Risk Based Auditing process in a simple and easy way to remember. The presenter provides relevant examples from real world situations which an Internal Auditor would have faced in his or her organisation. This course is a must for IA department that plans to start RBIA exercise in their organisation.
5
Anonymous Author
Valuable course for educating auditors and management about the value of RBIA that provides a step by step methodology which can be utilized as a starting place for organizations to begin to establish RBIA.
4
Anonymous Author
The instructor clearly explains risk based auditing and makes easy to understand all steps of RBIA methodology. Unfortunately slides have several grammatical errors
5
Member's Profile
Good coverage on risk based internal auditing and the preparedness towards that....Well covered in the course!!!
5
Anonymous Author
Excellent review on establishing Risk Based Internal auditing. Very thorough and relevant. Great examples.
5
Member's Profile
I like how the flow of ho each topics were presented in stages so that I could get a solid understanding.
5
Anonymous Author
Very good presentation on benefits and challenges IA faces when trying to implement risk based auditing.
5
Anonymous Author
Enjoyed the clear explanation of RBA. Straightforward and easily explainable to exec team peers.
5
Member's Profile
Program materials were relevant and contributed to the achievement of the learning objectives.
5
Anonymous Author
Clear and concise - great examples provided. A great course for any experienced auditor.
5
Member's Profile
It proposes a very well structure about how to establish a Risk Based Audit methodology.
5
Member's Profile
Good outline and guidance toward developing RBIA methodology for your organization.
5
Member's Profile
Good application of risk management principles to the whole internal audit process.
4
Member's Profile
instructor is very monotone and hard to listen to for a prolonged period of time
5
Member's Profile
Simple and straight to the point. Really well executed and useful.
4
Member's Profile
Enables a good understanding of a risk based audit methodology
4
Member's Profile
A great refresher and review for internal audit executives.
5
Anonymous Author
Great topic put in understandable and easy to follow way.
4
Anonymous Author
Steps involved in developing a RBIA and the challenges
5
Member's Profile
Informative. Focused contents on RBIA methodology.
5
Anonymous Author
Good explanation of the risk-based methodology.
5
Anonymous Author
helpful and straight forward - easy to follow
4
Member's Profile
New way of thinking of this topic for me
4
Member's Profile
Good explanation of risk based auditing
5
Member's Profile
Easy to understand, and very practical.
5
Member's Profile
I enjoy all of this instructors classes
4
Anonymous Author
Good pace and emphasis on key aspects.
5
Member's Profile
Nice course, gives a good perspective.
4
Member's Profile
good content and easy to understand
5
Member's Profile
I loved exam questions the most!
4
Member's Profile
Great, new information for me
5
Anonymous Author
Good, informative course.
4
Anonymous Author
It was a very good course
5
Member's Profile
Very helpful fr CAE's
4
Member's Profile
informative content.
4
Anonymous Author
Good review on RBIA
5
Anonymous Author
Clear and concise
5
Member's Profile
great course
4
Member's Profile
Great course!
5
Member's Profile
Great course
4
Member's Profile
none
4
Anonymous Author
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Prerequisites

Course Complexity: Intermediate

No Advanced Preparation or Prerequisites are needed for this course. However, it is recommended to take the other courses in the series prior to completing this one.

Education Provider Information

Company:
Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact:
For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Syllabus
INTRODUCTION AND OVERVIEW
  8:53Introduction to Risk Based Auditing Establishing The Methodology
Establishing a Methodology
  9:56Methodology Steps 1 and 2
  8:10Methodology Step 3
  10:50Ex: Risk Tolerance
  10:38Methodology Steps 4 - 6
  7:08Methodology Steps 7 - 10
  10:40Applying RB Questions within Methodology
  11:35Questions Steps 3 and 4
  9:38Utilizing Management in Developing RBIA Approach
CONCLUSION
  7:29Using Experts and Course Summary
Continuous Play
  1:34:58Risk Based Auditing: Establishing The Methodology
SUPPORTING MATERIALS
  PDFSlides: Risk Based Auditing – Establishing a Methodology
  PDFRisk Based Auditing – Establishing a Methodology Glossary/ Index
REVIEW and TEST
  quizREVIEW QUESTIONS
 examFINAL EXAM