The role of the internal auditor in risk management within selected Maltese companies

Abstract

Given the pace with which today's organisations are changing, new approaches for internal auditing as well as various discussions to corporate governance are being promoted. In line with these changes, a new model for internal auditing is emerging which is based on running an entire business through a focus on risk The objective of this study is to delve into the actual and potential changing role of the local internal auditor with respect to Risk Management. In the quest of arriving at such an objective, the following issues shall also be tackled: • The current role of the Internal Auditor within selected Maltese Companies • The extent to which risk is being managed in such companies • The actual and potential role, if any, that the internal auditor is playing in the management of risk in such companies. In arriving at such objectives, semi-structured interviews were carried out with eleven local internal auditors as well as nine management representatives. A case study is also included which is based on detailed discussions with the staff of an internal audit department within a local group of companies. The main conclusion, which emerges from this study, is that Risk Management within the local Maltese scenario is yet in its infancy phase and it lacks a strategic approach. The internal auditor's role is that of assisting management in the achievement organisational objectives and this includes, to various degrees managing risk within the company. Ultimate responsibility of Risk Assessment and Risk Management is vested in management. A number of recommendations are provided in order to improve the local situation with respect to the internal auditing profession.