In the context of ORM, what role do audits typically play?

Audits in the context of Operational Risk Management (ORM) serve a crucial function by assessing compliance with risk management policies. This involves evaluating whether the organization adheres to established risk mitigation strategies, operational procedures, and regulatory requirements. Through audits, organizations can identify gaps in their risk management processes, ensure that controls are effective, and support continuous improvement in their operational risk practices.

Additionally, audits provide an independent review of risk management practices, allowing for an objective perspective on how risks are managed within the organization. This independent evaluation helps organizations not only to comply with relevant standards and regulations but also to enhance their overall risk management framework, ensuring that risks are properly identified, measured, and managed.

The other options do not align with the primary purpose of audits within ORM. For instance, while audits contribute to managing risks, they do not eliminate them entirely, nor do they directly manage employee performance or focus on long-term strategic planning in a way that bypasses the core objective of compliance assessment.