What is the primary role of internal audit in Operational Risk Management (ORM)?

The primary role of internal audit in Operational Risk Management (ORM) is to evaluate the effectiveness of ORM processes. Internal auditors conduct independent assessments of the organization's risk management practices to determine whether they are adequate and functioning as intended. This evaluation includes reviewing risk identification, assessment, response strategies, and monitoring mechanisms to ensure that operational risks are being effectively managed.

By focusing on the effectiveness of ORM processes, internal audit provides assurance to the organization's management and stakeholders that operational risks are being identified and mitigated appropriately. This helps organizations enhance their risk management frameworks, thereby improving their resilience against potential operational disruptions.

While compliance with regulations, management of financial investments, and providing employee training are important functions within an organization, they do not primarily fall under the internal audit's core role in the context of ORM. Internal audit serves a distinct purpose in ensuring that ORM practices are both effective and aligned with the organization's risk appetite and strategic objectives, which ultimately contributes to the overall governance and risk management culture within the organization.