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Operational Risk

Description of Services: Global uncertainty around stable economic recovery has lead companies, irrespective of size, to invest more in defining and managing their risk profile. SMART Insights Group has the demonstrated expertise to execute the critical task of identifying, aligning and prioritizing risks, not only with a company’s appetite, but also with economic and industry realities. The next phase involves thoughtful development of strategic, interdependent tiers of activities designed to manage, monitor and mitigate exposure – at the same time, fully respecting the need for clients to confront their most distressing issues while “staying true” to traditional missions and advancing social interests vital to their business model.

Our value approach involves encouraging clients to place as much emphasis on “what must go right,” as they place on “what might go wrong.” This proactive, rather than reactive, approach is consistent with that of industry leaders and thriving organizations. The cornerstone of the SMART Insights Group’s operational risk methodology is underscoring that successful risk management has a direct impact on financial performance.

What we do: Risk, compliance and fraud assessment, market and industry benchmark analyses, internal audit management and support, business process redesign, regulatory compliance, organizational and department level policies and procedures and executive coaching.

Abstract: Internal Audit departments have graduated from the traditional reputation of providing little more than the police function of offering assurances based on routine or cyclical audit plans. Today, respected and successful internal audit leaders are expected, at minimum, to model departments from a risk-based perspective. In order to be recognized as pioneers with the industry, however, an internal audit structure must provide assurance on the effectiveness of risk management, rather than simply the existence of controls to mitigate risk. This model emphasizes the importance of audit’s advisory role as critical to an organization’s avoidance of loss and costs in this particularly sensitive economic climate.

Challenges: “I am unaware, until I receive negative findings on an audit report, that my department lacks adequate controls.” “Audit reports issued don’t really add value.” “The audit function is more of a nuisance than anything else.” “By the time we receive an audit report, the findings have already been resolved.”

How we helped: Our firm invested a great deal of energy on the assessment phase on this particular engagement. Surveying stakeholders and evaluating the organizational structure of the internal audit department itself became critical tools for developing the most effective solutions. We developed multidimensional proposition unique to this client’s, providing a broad range of solutions including: a reorganization and realignment of audit personnel with a comprehensive solutions including:
a reorganization and realignment of audit personnel with a comprehensive training package for the new audit staff; redesigned performance management tool with modified KPI's; restructured audit programs and a semi-automated platform for workpapers to prepare staff for full automation; development of a digital audit planning tool mapped to the client’s existing ERP system; established an advisory services function within the department to focus on surveying and providing counsel to the organization’s leadership without the anxiety often present with a full audit. Using our design, develop and deploy model, the audit department was able to experience: a 48% increase in its rate of efficiency issuing audit reports and a more satisfied client base. More importantly, the client experienced an immeasurable, ongoing benefit to the organization of identifying issues and risks and offering suggestions on thoughtful and creative measure to mitigate those risks through advisory services and counsel.