Simple Risk Assessment Techniques

Simple risk assessment techniques

The Institute of Internal Auditors Qatar Chapter held a training session on 'Simple Risk Assessment Techniques for internal auditors' by Alaba Adedamola Awolaja from Nigeria.  Alaba Awolaja, CIA, is a business professional and consultant with over a decade of banking and financial services. He is a dedicated risk management professional with a keen focus on identifying, assessing, managing, and controlling potential events that may affect entities' objectives and prevent/detecting fraud.

'Risk assessment is the overall process of risk identification, risk analysis, and risk evaluation. Risk assessment is at the center of a typical risk management process. Internal audit's risk assessments start by considering inherent risk, the combination of internal and external risks in their pure, uncontrolled state," said Alaba in his opening remarks.

The factors that influence selecting the right risk assessment technique depend on the complexity of the problem, the degree of uncertainty, the extent of resources needed, and the quantitative output requirement. The most common techniques are Brainstorming, Delphi, Scenario analysis, Structure What If (SWIFT), Hazard and Operability Studies (HAZOP), Business  Impact  Analysis, Bow Tie  Analysis, etc. Alaba detailed each technique on the correct usage, differentiating factors, comparative strengths, and relative benefits.

Alaba elucidated various standards and practical application of techniques in real-life situations. The standards applied mainly are the International Professional Practices Framework (IPPF) from the IIA, International Standard Organization (ISO), COSO methodology, and IRM structure. 

"Alaba's presentation was highly useful to improve continuous risk assessments in this era of the dynamic risks to navigate the stormy and uncertain future of businesses. The insightful presentation followed a great Q&A session that was appreciated for practical inputs," said Sundaresan Rajeswar Board member of the IIA Qatar

 "I have seen the use of elaborate, time-consuming methodologies, including formulas, to score individual risks. Sometimes these formulas seemed better suited for a rocket launch than calculating a single risk in an audit plan. As I often coach internal auditors, simplified formulas can be just as effective as complicated ones. Professional judgment will invariably be a  factor no matter how complex the process."  Alaba concluded by quoting from the book 'The Speed of Risk' by Richard F. Chambers, CEO of the IIA Inc.

Fahad al-Marri, Senior Vice President of the IIA Qatar, addressed the gathering. "Set personal improvement goals to improve your value as internal auditors as a new year resolution for 2021. Do write to the Chapter Board indicating the topics of interest to organize knowledge-sharing events," Fahad said.

Girish Jain, Murtaza, and Murali coordinated the event that ran for nearly two hours and had a full capacity of over 100 attendees.