Role of Internal Audit in Corporate Governance:

1. Assessment of Control Systems: Internal audit assesses the effectiveness of the company’s internal control systems to ensure that controls are adequate and functioning properly. This helps to maintain reliable financial reporting and compliance with regulations.
2. Support to the Board: Internal auditors provide the board with assurance on the effectiveness of control systems and risk management practices, helping the board fulfill its oversight responsibilities.
3. Monitoring Compliance: Internal audit monitors compliance with laws, regulations, and company policies, ensuring that the organization adheres to legal and regulatory requirements.
4. Improvement Recommendations: Internal auditors offer recommendations for improving processes and controls, enhancing the overall governance framework and operational efficiency.

Role of Internal Audit in Risk Management:

1. Risk Assessment: Internal audit plays a key role in identifying and assessing risks facing the organization. This involves evaluating the risk management processes and ensuring that risks are properly identified and mitigated.
2. Evaluation of Risk Management Framework: Internal audit evaluates the effectiveness of the risk management framework, including the implementation of risk mitigation strategies and the management of emerging risks.
3. Assurance on Risk Management: Internal auditors provide assurance to management and the board that risk management processes are effective and that significant risks are being managed appropriately.
4. Consultative Role: Internal audit may also provide consultative services to help management develop and implement risk management strategies, improving the organization’s ability to manage and respond to risks.

(1 mark for each point – 10 marks total)