The Role of Internal Audit in The Risk Management Process”

Abstract

The study has aimed to examine the determinants of risk management in the context of service industry of Karachi, Pakistan. The sample size is based on 196 responses that are analyzed using regression analysis. The results have showed that internal audit: independence has a positive but insignificant effect on risk management. The internal audit: objectivity has a positive and significant effect on risk management. The internal audit: competence has a negative and insignificant effect on risk management. The management support has a positive and significant effect on risk management. Moreover, managers may ensure that there is no conflict of interest between the employees carrying out the activity and the person or department assessing their performance. By doing so employees may uphold independency while performing their tasks that may ensure that risks are being managed efficiently as not many people are involved. It is further recommended that managers may provide efficient tools, tools such as computer systems and software’s that are up-to-date that may have the potential of providing maximum support to the audit department employees. Future researchers can use PLS-SEM as the data analysis method that can help in conducting mediating and moderating analysis on the topic