Auditing Risk Appetite Framework
- Online Classroom

• Understand the core components of risk appetite frameworks
• Develop skills to assess and audit risk appetite statements and tolerance levels
• Apply auditing techniques to evaluate and enhance risk appetite frameworks
• Communicate audit findings effectively and propose improvements.

Topics covered include:

1. Understand Risk Appetite Framework, its components and Its significance:

• Understand the organisational context and the strategic alignment of the Risk Appetite Framework.
• Assess how Risk Appetite Framework assist in organisational decision-making.
• Evaluate how Risk Appetite Framework is used to balance risk and reward.
• Assess how Risk Appetite Framework influences the organisational culture regarding risk.

2. Design a Risk Appetite Framework auditing methodology and tools:

• Assess Risk Appetite Framework components.
• Understand the relationships between established risk tolerance thresholds and different types of risks (eg. financial, operational, compliance).
• Review the risk capacity of an organisation.

3. Conduct risk assessments:

• Assess the methodologies used for identifying and assessing risks.
• Review if they cover a wide spectrum of potential risks that the organisation might face.
• Evaluate the techniques used for mapping and prioritising risks that aligns with the risk appetite thresholds.

4. Evaluating Risk Appetite Implementation:

• Evaluate the implementation of risk management policies and procedures that align with the defined risk appetite.
• Assess if the risk appetite framework complies with regulatory standards and industry best practices.

5. Review the methodologies used for quantifying risks:

• Assess the accuracy and reliability of quantitative measures used to assess risk exposure.
• Evaluate the effectiveness of Key Risk Indicators (KRIs) in monitoring and measuring risk exposure in alignment with the risk appetite.

6. Audit technology usage:

• Assess the use of technology-based tools for risk management and auditing purposes. Check if they streamline the auditing process and enhance accuracy
• Evaluate the use of data analytics tools to analyse historical data and identify patterns influencing risk appetite.

7. Audit reporting and recommendations:

• Develop audit findings into a comprehensive report highlighting areas of compliance, strengths, weaknesses, and recommendations for improvement.
• Provide actionable recommendations based on audit observations and industry best practices to enhance the risk appetite framework.