The definition of internal audit includes references to governance, risk management, and internal control. How are these activities to be understood?

All of these actions are intimately tied to one another and work towards the same overall goal, which is to give reasonable certainty that the enterprise’s goals will be achieved. The effectiveness of one action will have an impact on the effectiveness of the other activities, and vice versa:

Good governance will foster an environment that is conducive to the operations of internal control and risk management.

Effective Risk Management will improve Governance, aid in the proper implementation of Internal Control, and aid in more efficient resource allocation.

The goal of risk management at the business

By implementing risk management across the various company operations in a methodical and cost-effective way, risk management aims to assure the profitable performance of the Company and to ensure the continuity of the business. The company’s strategic and operational planning, daily decision-making, and internal control all include risk management.

The goals of Risk Management and Governance will be easier to accomplish with effective and efficient internal control.