What is the primary purpose of an internal audit in ORM?

The primary purpose of an internal audit in Operational Risk Management (ORM) is to independently evaluate risk management processes. This function is critical as it helps organizations identify weaknesses in their risk management practices, assess the effectiveness of controls in place, and ensure compliance with relevant policies and regulations. An internal audit provides an objective assessment that offers insights into how well the organization is managing its operational risks, thereby contributing to the overall risk governance framework.

By focusing on the evaluation of risk management processes, the internal audit can help organizations enhance their resilience against potential operational failures and improve their risk mitigation strategies. This independent perspective is essential for maintaining accountability and driving continuous improvement within the organization’s risk management activities.

While tracking employee performance, developing new business strategies, and ensuring customer satisfaction are important functions within an organization, they do not directly align with the core responsibilities of an internal audit in the context of ORM. The audit's role is specifically rooted in risk assessment and control evaluation, distinguishing it from operational performance and strategic planning areas.