The Role of Audit in Risk Management: A Toi Ohomai Case Study

This report delves into the critical role of audit in effective risk management, specifically examining the business of Toi Ohomai, an educational institution. The assessment emphasizes the significance of internal audits in identifying and mitigating business risks, focusing on audit procedures related to infection prevention. The report explores how audit processes can strengthen internal controls, particularly in addressing risks such as fraud and employee turnover. It highlights the importance of segregation of duties, monitoring key processes, and addressing IT concerns to ensure accurate financial reporting. The report also examines the practical application of audit in managing risks within the context of Toi Ohomai, emphasizing the importance of robust internal controls and the impact on financial accuracy and risk mitigation strategies.

Running head: AUDIT
Audit
Name of the Student:
Name of the University:
Author’s Note:

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Table of Contents
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Introduction
The main purpose of this assessment is to understand the important of audit as a tool in
risk management strategy and how the same helps the management of the company in managing
the risks of the business. The assessment considers the business of Toi Ohomai which is engaged
in providing education in technology for the students. The assessment deals with audit of
procedures which is related to infection prevention in the education institute. The assessment is
related to different audit procedures which is to be followed by the business for the purpose of
ensuring that the risks of the business are minimized.
Discussion
Role of Audit in Risk Management
The process of risk management is a continuous process which effectively requires the
management to identify and analyze the risks of the business effectively. The risk management
process effectively identifies threats and formulate strategies for combating such risks. The
internal audit process is an effective tool which is available to the management of the company
for identifying and managing the risks of the business. The risk management strategies of the
business are formulated on the basis of the internal audit results. The process of audit includes
assessment of the internal control system of the business which is an essential step towards
recognizing the internal control of the business. The assessment considers the business of Toi
Ohomai which is engaged in the business of providing different kinds of services needs to ensure
that the internal control of the business is appropriate. It is to be noted that a proper internal
control system needs to be maintained appropriately by the business so that the risks of the
business can be maintained. One of the major risks which is faced by the management of the
company is the risks relating to frauds and the same can be effectively controlled by regular audit

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of the business. Audit ensures that all the financial information is presented in an efficient
manner and the same also depicts a certain level of accuracy. Some of the major concerns
regarding risk management which is managed by appropriate auditing practices are listed below
in details:
 Segregation of Duties: It is generally noted that small businesses fail to segregate duties
properly which is the main reason that the risk of fraud are very high. This can be
effectively controlled by audit process as the auditor can identify such threats and suggest
measures which can mitigate such risks.
 Monitoring Key Processes and Control: An appropriate audit process considers the
main processes and activities of the businesses as the same are most vulnerable to risks.
This helps in reductions of errors and omissions and present accurate financial data.
 Reducing the Impact of Employee Turnover: One of the maj0or risks which the
businesses faces are from the turnover of employee. Some employee is very valuable to a
company and loss of the same affects the business adversely. Audit helps businesses
document the knowledge of the employees so that transition of employee do not affect
the productivity of the business and therefore the business can operate freely without
facing risks.
 Addressing IT Concerns: The internal control concerns in a business is major threat
and it is the role of the internal auditor to identify weaknesses in the internal control of
the business and suggest alternative measures which can improve the internal control of
the business.
The business of Toi Ohomai has diversified operations for which the internal control of
the business needs to be appropriate. This helps in proper risk management and also ensuring

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that the financial information which are demonstrated by the business are accurate and are
showing true and fair view.