Murdoch University

1. Murdoch University RISK MANAGEMENT Senate Induction

2. RISK MANAGEMENT – Presenter’s Background • FIIA, FCPA, Registered Company Auditor, CD • 6 years lecturing & tutoring at Edith Cowan University • Board of Governors of the IIA for 13 years & presented IIA training courses on “Risk Management, Introduction to Auditing, Re-inventing Internal Audit, Operational Auditing” • 25 years auditing experience in Government & Commercial sector and Deputy State Manager of the Health Insurance Commission in WA

3. PRESENTATION OBJECTIVES • what is Risk ? • what is Risk Management ? • who is responsible for Risk Management ? • how do we manage Risks ? • the benefits of Risk Management • accountability for Risk Management • success factors in implementing Risk Management • embedding Risk Management • conclusion & questions

4. What is Risk ? • Risk if unmanaged, may prevent an Organisation from achieving corporate goals – it’s what keeps us awake at night ! • Risk is not always a bad thing • Risk can be strategic or operational

5. Examples of Risk • Political & Relationship • Customer Service • Reputation/Ethics • Competition & Marketing • Academic Quality • Intellectual Property • Business Continuity • Financial & Fraud • Technological • Legal • Asset Utilisation & Security • Human Resource & Industrial Relations

6. What is Risk Management ? • Assess the risk = Likelihood * Impact • Risk Management Options are • accept the risk (do nothing) • transfer the risk via insurance or contract • eradicate the risk • manage the risk by putting in place risk reduction strategies • Monitor & Review Risk in priority order & with cost benefit considerations

7. Initial Risk = Impact * Likelihood = High Risk Less : Risk Reduction Processes regular preventative maintenance adherence to speed limit attendance at a defensive driving course seat belts are always worn insurance policy Residual Risk = Low Risk rating Action Required – Accept the Low Risk level Car Accident Risk

8. Who is Responsible for RiskManagement ? • Everyone ; & • All the time as the Risk environment is dynamic not static

9. Risk Management Benefits • Helps prioritise our limited resources into the areas of greatest need • Improves our ability to achieve our Corporate Goals • Represents good Corporate Governance – internal & external benefits • Favourable impact on Insurance premiums

10. Risk Management Reporting ? • Each operational area should produce & annually review their plan & “sign off” • Risk Management Plan & Register should be annually reported to the Senior Executive Group & to the Senate • The Audit & Risk Committee will oversight Risk Management activity

11. Critical Success Factors • have ongoing support from the Senate & the Senior Executive Group • have ongoing support from the Senate & the Senior Executive Group • have ongoing support from the Senate & the Senior Executive Group

12. Embedding Risk Management • Risk management belongs to everyone and all the time • The Corporate Plan should deal with Risk (Threats) • Project submissions to Senate should deal with Risk • School/Divisional papers should deal with Risk

13. CONCLUSION & QUESTIONS what is Risk ? what is Risk Management ? who is responsible for Risk Management ? how do we manage Risks ? benefits of Risk Management accountability for Risk Management ? success factors in implementing Risk Management embedding Risk Management

14. Murdoch University INTERNAL AUDIT Senate Induction

15. PRESENTATION OBJECTIVES • what is Internal Audit ? • what is the role of the Audit & Risk Management Committee ? • the difference between Internal & External Audit ? • accountability requirements for Internal Audit • the significance of the Annual Audit Plan • what are the different types of audit ? • conclusion & questions

16. What is Internal Audit ? • Audit is the second oldest profession in the world • Internal Audit is an independent/unbiased review activity • Internal Audit has changed from being a “bloodhound” looking solely at financial compliance issues to internal consultants looking at all operational issues on a risk rather than a time cycle basis • Internal Audit is a major Corporate Governance mechanism

17. What is the Role of the Audit & Risk Management Committee ? • Prescribed in the Committee’s Terms of Reference

18. Differences between Internal & External Audit • External Audit’s primary focus is on the truth and fairness of the annual financial statements – this is primarily a financial compliance focus • Internal Audit focuses on financial issues but also on operational issues such as economy, efficiency & effectiveness and on legal compliance and IT issues ?

19. Accountability requirements for Internal Audit – WHO AUDITS THE AUDITORS ???? • annual review of work by the external auditor • Peer Review every 4-5 years • ongoing review by the Deputy Vice Chancellor • quarterly & annual review by the Audit & Risk Management Committee • client surveys are done on the completion of each audit

20. The significance of the Annual Audit Plan • represents a defensible coverage of major risk areas • allows the Committee to monitor the performance of Internal Audit • has a nexus with the high risk areas contained in the Corporate Plan

21. What are the different types of Audit ? • Financial compliance • Operational – efficiency, economy & effectiveness • Legal Compliance • IT • Comprehensive

22. Conclusion & Questions • what is Internal Audit ? • what is the role of the Audit & Risk Management Committee ? • the difference between Internal & External Audit ? • accountability requirements for Internal Audit • the significance of the Annual Audit Plan • what are the different types of audit ? • conclusion & questions

23. Andrew Burchfield’s Contact Details • Telephone – 9360 6167 • Email – a.burchfield@murdoch.edu.au • Fax - 9360 7286 • Murdoch Home Page re Internal Audit & Risk – http://www.murdoch.edu.au/vco/audit/audit.html