audit planning and risk assessment case study

Understanding Risk assessment in audit planning

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• Published on Dec 4 2023

Table of Contents

Definition of risk assessment in audit planning, the fundamentals of risk assessment, understanding the components of risk in audit, risk assessment procedures, risk assessment for ensuring audit effectiveness, challenges in risk assessment, strategies for overcoming challenges, become a certified information system auditor, final thought.

Risk assessment in audit planning is a crucial step in the auditing process, involving the careful evaluation of potential risks that could impact the success and reliability of an audit. Risk assessment essentially means identifying, analyzing, and understanding the various factors that may affect the outcome of an audit engagement. It's like a detective's work before solving a case – anticipating potential challenges and pitfalls.

In the world of audits, this process is essential to pinpoint areas where errors, fraud, and cybersecurity threats might occur. By clearly defining what risks might be present, including those related to cybersecurity planning , auditors can tailor their strategies accordingly, ensuring a more focused and effective approach to risk mitigation. Essentially, risk assessment acts as the compass, guiding auditors through the maze of financial data and potential cybersecurity challenges to ensure a thorough and reliable examination.

In this blog, we will delve into the fundamentals, components, and procedures of risk assessment, shedding light on its pivotal role in the effectiveness of the entire audit process. Let's embark on this journey to demystify the world of risk assessment in audit planning.

In the world of auditing, understanding Risk Assessment is like to having a reliable compass for navigating the intricate landscape of financial examination. To embark on this journey effectively, it's crucial to grasp the fundamental principles that underpin risk assessment in audit planning.

Before auditors jump into the nitty-gritty of risk assessment procedures and audit planning, a solid understanding of these fundamental concepts is paramount. Why? Because it forms the bedrock of a successful audit. Imagine trying to navigate a city without understanding cardinal directions—it would be challenging and prone to errors.

By grasping these fundamentals, auditors are better equipped to tailor their audit plans, ensuring they are attuned to the unique risks each business faces. In the next section, we will delve into the specific procedures that bring these principles to life.

In the realm of audit planning and Risk Assessment in Audit Planning , a crucial aspect is understanding the various components of risk that play a pivotal role in ensuring the reliability of the audit process. Let's delve into these components:

Identifying Key Components of Risk

Audit, at its core, faces three primary components of risk:

Inherent Risk

Inherent risk is like the DNA of a business; it's the risk that exists even if everything is operating as it should. This could be due to the nature of the industry, economic conditions, or the complexity of certain transactions. For instance, if a business operates in a volatile market, the inherent risk would be higher.

Control Risk

Now, imagine a set of traffic lights controlling the flow of cars. Control risk is akin to assessing how effective these traffic lights are in preventing accidents. It's the risk that the internal controls of a company may not catch or prevent errors or fraud. If a company lacks robust internal controls, the control risk is higher.

Detection Risk

Detection risk is about the auditor's ability to spot mistakes or irregularities during the audit. Think of it as the sharp eyes of a detective scanning through evidence. If an auditor is not thorough in their examination, detection risk increases, and potential issues may go unnoticed.

Interplay of These Components in the Audit Process

In the time of audit, these components interact dynamically. Imagine a delicate balance beam routine at the Olympics:

High Inherent Risk

The auditor recognizes a business operating in a high-risk industry. This means they need to be extra cautious and thorough in their audit procedures.

High Control Risk

If internal controls within a company are not up to snuff, the auditor may need to adjust their audit plan to account for this increased risk.

High Detection Risk

If an auditor's procedures are not meticulous, there's a risk they might miss critical errors or fraudulent activities during the audit.

Navigating through the intricacies of risk assessment, risk analysis, and audit planning with precision is key to a successful audit.

In the realm of audit planning, Risk Assessment Procedures play a pivotal role in ensuring a thorough and effective examination of financial statements and processes. These procedures serve as the compass, guiding auditors through the complex terrain of potential risks.

• Risk Identification

Risk Identification marks the starting point of the audit journey. Auditors systematically unearth and recognize risks that could impact the accuracy of financial statements. These risks can stem from various sources, including internal processes, external market conditions, or regulatory changes.

• Risk Analysis

Once risks are identified, the next step is Risk Analysis . Here, auditors delve deeper to understand the nature and magnitude of each risk. This involves evaluating the likelihood of occurrence and the potential impact on the financial statements. By assigning a level of significance to each risk, auditors prioritize their focus during the audit.

• Risk Response

Armed with a comprehensive understanding of identified risks, auditors proceed to Risk Response. This phase involves developing strategies to mitigate or manage the identified risks. It's about crafting a tailored approach to address each risk, ensuring that the audit process remains robust and effective.

• Ongoing Risk Assessment

Importantly, risk assessment isn't a one-time endeavor confined to the planning phase. Ongoing Risk Assessment is a continuous process that unfolds throughout the audit engagement. Auditors remain vigilant, adapting to changes in the business landscape and promptly addressing emerging risks.

Incorporating advanced tools and technologies, auditors can streamline these procedures, enhancing efficiency and precision. According to a survey by the Association of Certified Fraud Examiners, 80% of respondents reported that technology has had a positive impact on their ability to detect and prevent fraud during the audit process.

In the world of auditing, success hinges on a fundamental process: Risk Assessment. This critical step doesn't just tick a box; it's the compass guiding the entire audit journey. Let's delve into how a meticulous risk assessment isn't just a protocol but a key to unlocking more effective and streamlined audits.Top of Form

Strategic Insight

Risk assessment isn't a checkbox exercise; it's a strategic tool. It provides auditors with specialized lenses, allowing them to focus on the nuanced landscape of challenges and opportunities within an organization.

Components of Risk

Understanding the intricacies of risk components, such as inherent risk, control risk, and detection risk, gives auditors a tailored perspective and a comprehensive view of potential pitfalls.

Roadmap for Focus

A robust risk assessment isn't arbitrary; it's a roadmap. It guides auditors to concentrate on areas of genuine significance. Studies show that audits guided by thorough risk assessment are 25% more likely to meet their objectives.

Questioning for Precision

It's more than ticking boxes. A comprehensive risk assessment empowers auditors to pose the right questions: What threats exist to the organization's financial health? Where do internal controls need strengthening?

Efficiency Boost

Efficiency is the ally of effectiveness. A focused risk assessment doesn't just elevate audit quality; it streamlines the entire process. Organizations practicing effective risk assessment report a 15% reduction in audit time .

In essence, risk assessment isn't a bureaucratic hurdle; it's the secret ingredient to audit triumph. It provides clarity of vision, guides auditors with precision, and ensures each audit isn't merely a task completed but a mission accomplished.

Risk assessment is a crucial step in audit planning, but it comes with its fair share of challenges. Identifying and overcoming these challenges are essential for conducting effective and reliable audits.

• Lack of Data Accuracy : One common hurdle is the availability and accuracy of data. In many cases, auditors may encounter incomplete or outdated information, making it difficult to assess risks accurately.
• Subjectivity in Risk Perception : Another challenge is the subjective nature of risk perception. Different team members may have varied views on the severity of a risk, leading to potential discrepancies in the assessment process.
• Dynamic Business Environments : Rapid changes in the business environment can pose challenges in risk assessment. Industries are evolving, and auditors must adapt to new technologies, regulations, and market trends.
• Inadequate Communication : Poor communication among audit team members and with the client can impede the risk assessment process. Clear communication is vital to understanding the nuances of the business and potential risks involved.
• Resource Constraints : Limited time and resources can hinder a thorough risk assessment. In a fast-paced business world, auditors may face pressures to complete assessments quickly, potentially overlooking critical details.

Challenges in risk assessment and audit planning are part of the audit landscape, but auditors can proactively address these issues with effective strategies. Here are practical solutions to navigate common challenges associated with risk assessment, risk analysis, and audit planning:

• Data Quality Improvement: To combat issues related to data accuracy in Risk Assessment, auditors should advocate for regular data quality assessments. Establishing protocols for data validation and verification ensures that the information used in Risk Analysis and audit planning is reliable.
• Standardized Risk Criteria: Addressing the subjectivity in Risk Perception involves implementing standardized risk criteria. Developing a clear framework with predefined risk categories and severity levels helps align the team's understanding of risks during Audit Planning and Risk Assessment.
• Continuous Training and Education: In the face of dynamic business environments, ongoing training is essential for effective Risk Assessment and Audit Planning. Auditors should invest in professional development to stay updated on industry changes, emerging risks, and new technologies that could impact the audit process.
• Enhanced Communication Protocols: Improving communication within the audit team and with the client is crucial for successful Risk Assessment and Audit Planning. Establishing regular meetings, feedback sessions, and transparent communication channels fosters a collaborative environment, ensuring everyone is on the same page during Risk Analysis.
• Effective Time Management: Addressing resource constraints in Risk Assessment requires effective time management. Auditors should prioritize tasks based on risk significance during Audit Planning and allocate resources accordingly. This may involve setting realistic timelines and expectations with clients.

By adopting these strategies, auditors can enhance the overall effectiveness of the Risk Assessment process in Audit Planning.

In the dynamic field of auditing, staying ahead is not just a choice but a necessity. One effective way to boost your auditing prowess is by becoming a Certified Information Systems Auditor (CISA).

Why CISA Certification Matters?

In the realm of auditing, the Certified Information Systems Auditor (CISA) certification holds exceptional relevance. It signifies your expertise in auditing, controlling, and monitoring information systems—an invaluable asset in today's cybersecurity landscape.

Sprintzeal's CISA Course Benefits

Choosing Sprintzeal for your CISA journey brings several advantages:

• Complete Coverage: Sprintzeal's course thoroughly addresses all CISA domains, ensuring comprehensive knowledge.
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Investing in Sprintzeal's CISA course isn't just about a certification; it's a strategic move to empower your professional journey. The skills acquired will significantly strengthen your ability to conduct effective risk assessments in audit planning, a critical aspect of ensuring audit success.

In the world of auditing, a robust risk assessment is the linchpin for a triumphant audit process. Delving into the nuances of inherent, control, and detection risks empowers auditors to navigate challenges adeptly.

As we conclude, it's evident that a meticulous approach to risk identification, analysis, and response is indispensable for audit planning and effectiveness. Remember, the strength of a resilient audit plan lies in foreseeing, evaluating, and mitigating risks.

Ready to advance your skills? Explore the Certified Information Systems Auditor (CISA) course with Sprintzeal . For more details, visit Sprintzeal or click here to contact us.

What is a risk assessment in auditing?

A risk assessment in auditing is the process of identifying and evaluating potential risks to financial statement accuracy.

What is risk assessment in planning?

Risk assessment in planning for audits involves evaluating uncertainties to create an effective audit strategy.

What are risk factors in audit planning?

Risk factors in audit planning are conditions impacting financial statement reliability, guiding strategy development.

What does risk assessment mean?

Risk assessment is the proactive evaluation of potential risks' impact and likelihood, ensuring accurate reporting in auditing.

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Niharika Chaurasia

Niharika is a technical content writer in the education niche with vast experience in creating content for certifications and training programs. She creates engaging, easy-to-understand, and valuable content for both beginners and professionals aspiring to enhance their careers.

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Continuous Auditing and Risk-Based Audit Planning—An Empirical Analysis

We thank the participants and discussant of the 2019 AAA Information Systems Section Meeting in San Antonio, TX and the 2019 European Accounting Association Conference in Cyprus for helpful comments and suggestions.

Marc Eulerich, Christine Georgi, and Alexander Schmidt, University of Duisburg-Essen, Mercator School of Management, Duisburg, Germany.

Editor's note: Accepted by Jun Dai.

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Marc Eulerich , Christine Georgi , Alexander Schmidt; Continuous Auditing and Risk-Based Audit Planning—An Empirical Analysis. Journal of Emerging Technologies in Accounting 1 September 2020; 17 (2): 141–155. https://doi.org/10.2308/JETA-2020-004

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Due to rapidly changing risks in companies, a continuous alignment of internal audit activities with the relevant risks is required. Continuous auditing (CA) is one possible way to meet these requirements. Specifically, the internal audit function (IAF) could use CA as a methodology in order to add a continuous perspective to their risk assessment. This study examines factors associated with the use of CA information in the IAF's risk-based audit planning (RBAP). We use survey data from 264 chief audit executives to address our research question. We find several factors having a positive influence on the use of information from CA in RBAP. These factors include the importance of data analytics, the collaboration with the audit committee and external auditor, as well as the use of IAF's results for fraud prevention. Furthermore, our additional analysis presents various positive effects of CA on potential output measures of internal auditing.

JEL Classifications:  G30; G32; G34; M42.

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The first article in this series of two on Paper P7 case study questions discussed question style, what to look for in the requirements, how higher-level skills are tested, and the meaning of professional marks within a question requirement. This second article goes through part of a typical Section A case study question, applying the recommended approach described in the previous article. This approach comprises four stages.

Stage 1 – understanding the requirement

The first thing to do is to read and fully understand the question requirement. Here is the requirement we will be looking at in this article:

‘Prepare a report, to be used by a partner in your firm, in which you identify and evaluate the professional, ethical, and other issues raised in deciding whether to accept the appointment as provider of an assurance opinion as requested by Petsupply Co.’ (12 marks)

Note: this requirement includes two professional marks.

Having read the requirement, break it down. You are asked to do two things:

• identify, ie state from the information provided
• evaluate, ie discuss from a critical point of view.

The requirement asks you to consider ‘professional, ethical, and other issues’. This could cover a wide range of considerations, such as:

• ethics: independence, competence, conflicts of interest, confidentiality, assessing integrity
• professional issues: the risk profile of the work requested, the fee – and whether it is sufficient to compensate for high risk, availability of staff, managing client expectations, logistical matters such as timing, legal and regulatory matters – such as money laundering, and (in some cases) obtaining professional clearance
• other issues: whether the work ‘fits’ with the commercial strategy of the audit firm, the potential knock-on effect of taking on the work – such as the impact on other clients, or on other work performed for this client.

You are asked to produce a report, so remember that the professional marks available will be awarded for using the correct format, the use of professional business language, and for presenting your comments as a logical flow culminating in a conclusion.

From reading the requirement, you know that the question scenario will be based on a potential assurance assignment and will be broadly based around acceptance issues.

Stage 2 – reading the scenario

When reading through the detail of the scenario, you should now be alert to information relevant to this requirement. Highlight important points that you think are relevant to the scenario and remember to focus on issues that could affect your acceptance of a potential assurance assignment.

Now read the following extract from the scenario and highlight the salient points – remember to look out for any factors relevant to the ethical, professional, and other issues described above.

Extract: You are a senior manager in Dyke & Co, a small firm of Chartered Certified Accountants, which specialises in providing audits and financial statement reviews for small to medium-sized companies. You are responsible for evaluating potential assurance engagements, and for producing a brief report on each prospective piece of work to be used by the partners in your firm when deciding whether to accept or decline the engagement. Dyke & Co is keen to expand the assurance services offered, as a replacement for revenue lost from the many small‑company clients choosing not to have a statutory audit in recent years. It is currently May 2007.

Petsupply Co has been an audit client of Dyke & Co for the past three years. The company owns and operates a chain of retail outlets selling pet supplies. The finance director of Petsupply Co recently communicated with your firm to enquire about the provision of an assurance report on data provided in the Environmental Report published on the company’s website. The following is an extract from the e-mail sent to your firm from the finance director of Petsupply Co:

‘At the last board meeting, my fellow directors discussed the content of the Environmental Report. They are keen to ensure that the data contained in the report is credible, and they have asked whether your firm would be willing to provide some kind of opinion verifying the disclosures made. Petsupply Co is strongly committed to disclosing environmental data, and information gathered from our website indicates that our customers are very interested in environmental matters. It is therefore important to us that Petsupply Co reports positive information which should help to retain existing customers, and to attract new customers. I am keen to hear your views on this matter at your earliest convenience. We would like verification of the data as soon as possible.’

You have looked at Petsupply Co’s Environmental Report on the company website, and found a great deal of numerical data provided, some of which is shown below in Table 1.

Table 1: Petsupply Co's environmental report – numerical data

Stage 3 – take time to think about the requirement and the scenario.

As discussed in the previous article, you must take time and not rush to answer. When evaluating this particular scenario try to think widely about the information provided. Your answer should cover a broad range of issues rather than concentrating on one or two. Your comments must be tailored to the scenario. It is pointless, for example, to write about a general acceptance issue which is not specifically related to Petsupply Co.

It is important to appreciate that few marks will be available for stating the issue. The higher-level skill marks in this question will be awarded for a discussion of why the issue is relevant to the decision about whether or not to provide the assurance service to Petsupply Co. The requirement is to evaluate the scenario and therefore it is crucial to demonstrate an appreciation that there may be two conflicting sides to the discussion.

Table 2 shows an example of a thought process which identifies the issues and explains why each issue is relevant to the requirement; the issues are shown in the order in which they appear in the question.

Table 2: Example of a thought process which identifies issues and shows relevance to the requirement

Table 2 is not an answer, it is a thought process. This is what you should be thinking about after reading through the scenario. The previous article stressed the importance of thinking through the scenario. It may help to jot these ideas down in an answer plan before making a start on your written answer, as this will help you to prioritise the points and give the report a logical flow.

Stage 4 – writing the report

The requirement states that two professional marks are available. As discussed in the previous article, these marks are not for the technical content of the answer, but for the way the relevant points are communicated. The report will be evaluated on the following:

• Use of a report format – a brief introduction, clear separate sections each discussing a different point, and a final conclusion.
• Style of writing – the report is addressed to the partner and so language should be appropriate. You do not need to explain things that would be obvious to a partner, and you must be tactful.
• Clarity of explanation – make sure that each point is explained simply and precisely, and avoid ambiguity.
• Evaluation skills – demonstrate that each point may have a positive and a negative side.

Remember, when answering any question requirement it is quality not quantity that counts. You should make each point succinctly and remain focused on the specific requirement. Questions can be time pressured, but it is important to remember that you should be able to read the requirement, think about it, and write an answer in the time available. This means that there is only a limited amount of time available for actually writing the answer, so keep it short and to the point. Irrelevant waffle earns no marks and will detract from the professional skills evaluation. What follows is an outline report format for this requirement:

Introduction

• Report is internal, addressed to a partner, covering proposed assurance service for existing audit client

Section 1 – ethical matters

• Provision of non-audit service
• Impact on total fee from client
• Competence to perform work – specialised engagement

Section 2 – risk-related matters

• High inherent risk – figures prone to manipulation
• Data highly subjective
• Need to rely on systems put in place by client

Section 3 – commercial matters

• Fee will have to be high enough to compensate for high risk
• Fee may need to compensate for specialists if used
• Strategic fit – assignment in line with commercial goals of Dyke & Co
• Build up experience in non-audit service
• Ascertain whether assignment will be recurring

Section 4 – other matters

• Managing client expectation regarding type of opinion sought
• Managing client expectation regarding timeframe
• Summary of key issues and decision on acceptance

Note: not all of the above points are necessary to secure a pass mark; the marking scheme is also flexible enough to cater for comments that may not appear in the ‘model answer’.

This article shows how to approach one requirement from a typical Section A question in Paper P7. It is important to practise technique by attempting as many questions as possible, starting with the Pilot Paper for Paper P7.

Written by a member of the Paper P7 examining team

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Risk based internal auditing within Greek banks: a case study approach

• Published: 01 October 2008
• Volume 13 , pages 101–130, ( 2009 )

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• Andreas G. Koutoupis 1 &
• Anastasios Tsamis 1  

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Internal Audit functions within Greek banks are imposed both by the Greek law for publicly listed enterprises (Law 3016/17.5.2002), as well as by the Bank of Greece (Bank of Greece Governor’s Act. Number 2577/9-3-2006). Based on the traditional approach of internal audit within Greek Banks, an inspection of branches and credit on a tick and check (compliance) basis was conducted. Recent research (Koutoupis and Tsamis, Fourth European Academic Conference on Internal Audit and Corporate Governance. Cass Business School, London, United Kingdom, 2006) comes to a conclusion that this approach does not result in adequate coverage of risks. In addition, new international regulations and best practices such as basel committee on banking supervision requirements, COSO enterprise risk management (ERM) suggested framework, as well as The Institute of internal auditors standards for professional practice of internal auditing (standards) were in most cases partially or fully ignored by the vast majority of Greek banks. However, minimum requirements regarding the operation of internal audit functions have been set up by the Bank of Greece, which in most cases are followed by the Greek banks, as well as periodically assessed by the above banking regulator. Risk based internal audit (RBIA) was an unknown concept for the vast majority of publicly listed and non-listed Greek enterprises until very recently. Only Greek subsidiaries of US and UK enterprises were aware of the RBIA audit concept (including big foreign banks which operate in Greece as subsidiaries), as they were periodically audited by group audit functions as an immediate result of relevant risk assessments. Also, the majority of Greek publicly listed enterprises use the audit cycle approach in developing their long term (3 year) and annual audit plans, which means that they audit specific business cycles and activities within a predefined time interval (1–3 years). Audit planning is based on the head’s of internal audit and internal auditors experience without formal application of risk assessment and audit planning techniques. All Greek banks that participated in the corporate governance and internal auditing survey (Koutoupis, Third European Academic Conference on Internal Audit and Corporate Governance, 2005) stated that they follow a risk-based audit approach and develop risk based audit plans; however the vast majority of them could not prove it through a clearly documented risk assessment and risk-based audit plan. Sarbanes–Oxley Act (2002) directed National Bank of Greece to adjust its audit planning process to a risk based one. Also, other big Greek banks (case study 1–3) are now either considering or adopting a RBIA approach, mostly because of Bank of Greece pressures. internal audit functions within small banks still follow the audit cycle approach. In this paper, current status of Greek banks RBIA approach will be discussed based on relevant references, as well as on three case study examples. This research will be based on relevant literature review, as well as authors’ professional experience in past and current projects related to risk assessment, audit planning and RBIA. Specifically, RBIA approach will be critically evaluated based on three big Greek banks analysis on a case study format and benchmark against basel requirements, ERM and standards for professional practice of internal auditing. Based on the relevant assessment, best practices and recommendations for improvement will be identified.

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For more about Risk based internal auditing (RBIA), see Risk Based Internal Auditing (Position Paper). The Institute of Internal Auditors, UK and Ireland, August 2003.

Enterprise Risk Management Framework. USA: Committee of Sponsoring Organizations (COSO), 2004.

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Abbreviations

Enterprise risk management

Chief audit executives

Risk based internal audit

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Department of Public Administration, Auditing & Taxation Sector, Panteion University of Social and Political Sciences, 268 Kifisias st., Chalandri, Athens, Greece

Andreas G. Koutoupis & Anastasios Tsamis

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Correspondence to Andreas G. Koutoupis .

1.1 Case study 2 custom measures

1.1.1 branches.

As far as for the branches network the qualitative and quantitative criteria used:

Code and serial number of branch;

The code refers to the number that is assigned to the branch on the "ON-LINE" system of the bank;

State and category of the branch;

Additional products offered by the branch This relates to all products offered by the branch that are in addition to the basic products offered. These may be offered by each branch within the approved limits based on its category;

Number of personnel in each branch The data were collected from the relevant central division, which provided internal audit division with the relevant chart showing the actual number of personnel in each branch;

Branch financial results The branch financial results were provided by the financial division for the year ended 31/12/2004;

Number and balance of depository accounts, and repos The data were collected from "electronic system of the bank" with accounting balance on 31/12/2004;

Number and balance of loan accounts The data were collected from "electronic system of the bank" with accounting balance on 31/12/2004;

Existence of organizational changes within the year The data was collected from the relevant central division of the bank, which provided internal audit with the relevant chart showing all the organizational changes during last year (2004 and after) for managerial and sub-managerial positions within the branch;

Years elapsed since last audit conducted by the internal audit division These data refer to audits performed from 2000 and onwards. Prior audits are not considered given that a period of more than 6 years elapsed. Audits performed in collaboration with external advisors are included in the audit work performed by the management. Likewise branches that have never been audited are marked with a high risk score;

Data since last audit from Central Bank of Greece or any other regulatory authorities;

Areas covered during last audit and type of audit The data were extracted using the audit reports issued, found in the database of the division;

Special issues The data were collected from the Department of Examination of Special Issues. Only the most important special issues were included. Basic categories of special issues are: financing issues, cash deficiencies, depository accounts related issues, ΑΤΜs, robberies, card skimming, employee disputes, commitment to the branch budgeted finance and deposits (credit divisions).

The following data were taken in consideration for the calculation: industry data, market data, geographic data, competition data, amount of transactions in the past years.

1.1.2 Central divisions

In relation to central divisions, the qualitative and quantitative data used:

Operations of central divisions The operations referred are directly related to the organization of the bank;

Existence of documented procedures Acceptable answers in this field: exist and are fully documented, exist with some omissions, no documented procedures;

Organizational changes within the year The data were collected from the relevant central division of the bank, which provided internal audit division with the relevant chart showing all the organizational changes during 2004 and after, for managerial, and sub-managerial positions within the central division, and the sub-division the change relates to;

Information systems changes within the year The data were collected from the information systems control sub-division and relates to changes that will be made to information systems and electronic banking divisions;

Years elapsed since last audit performed by the internal audit division These data refers to audits performed from 2000 and onwards. Prior audits are not considered given that a period of more than 6 years elapsed. Audits performed in collaboration with external advisors are included in the audit work performed by the management. Likewise central divisions that have never been audited are marked with a high risk score;

Areas covered during last audit and type of audit;

Audit performed by external auditors;

Special issues;

Commitment to the central division budget The data were collected from central finance division with accounting balance on 31/12/2004.

1.1.3 Subsidiaries

In relation to subsidiaries the qualitative, and quantitative data used:

Industry and location The industry the subsidiary operates in and its location;

Shareholding of the bank The data were collected by the Department of Subsidiaries of Internal Audit Division of the bank with data dated January 2005. The shareholding is a result derived both from direct and indirect shareholdings of the bank;

Basic products The basic products the subsidiary deals with according to data provided by subsidiaries department;

Activities/transaction cycles The activities and main transaction cycles of subsidiaries were identified. As far as industrial companies for which no audit schedules were devised the activities used were derived from the general audit schedule of industrial companies;

Personnel number The data were collected by the strategic division of the bank, which provided us with the relevant chart showing the number of personnel in each subsidiary;

Existence of internal audit division/number of auditors , The existence of internal audit division and the number of personnel employed;

Financial results The financial results were provided by the division of group strategy for the year ended 31/12/2004;

Organizational changes within the year The data were collected from the division of group strategy, and relates to all organizational changes of subsidiaries during last year (2004 and after) for managing director or director positions in the company;

Years elapsed since last audit performed by internal audit division These data refer to audits performed from 2000 and onwards. Prior audits are not considered given that a period of more than 6 years elapsed. Likewise subsidiaries that have never been audited are marked with a high risk score;

Audit performed from external auditors;

Special issues.

1.2 Case study 2 risk rating per auditable unit

Red = High risk units, branches, subsidaries, and central divisions

Yellow = Medium risk units, branches, subsidaries, and central divisions

Green = Low risk units, branches, subsidaries, and central divisions

1.3 Case studies 1, 2 & 3 comparative table

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Koutoupis, A.G., Tsamis, A. Risk based internal auditing within Greek banks: a case study approach. J Manag Gov 13 , 101–130 (2009). https://doi.org/10.1007/s10997-008-9072-7

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Received : 01 December 2007

Revised : 01 March 2008

Accepted : 21 July 2008

Published : 01 October 2008

Issue Date : May 2009

DOI : https://doi.org/10.1007/s10997-008-9072-7

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