Enhancing Company Performance Through Risk Governance Evaluation Based on ERM ISO 31000:2018 Facilitated by Internal Auditors

Matias Andika Yuwono, Lena Ellitan

Abstract


In increasingly complex and dynamic business developments, this research analyzes the strategic role of internal auditors in assessing risk governance in an organization using the ISO: 31000 enterprise risk management approach and its implications for corporate performance. The assurance process carried out by internal audit can use the three-line method approach. The three-line method approach prioritizes the importance of the role of three interrelated lines of defense, namely: the first line (operational), which is the front part of the company that faces risks; the second line (supervision) which acts as the controller and supervisor of the first line, then the third line, namely internal audit which functions as the party that carries out independent evaluation and analysis of the control performance. The research that has been carried out has shown that internal audit plays a vital role in implementing ERM, such as identifying and assessing risks that may arise in the company and then providing recommendations on internal controls that are not yet effective in delivering added value to the company. Apart from that, practical assurance activities by internal auditors can provide benefits in optimizing risk governance, which can create a sound risk culture in every company's operational activity.

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References


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