Risk Management and Internal Audit in Not for Profit Organizations
63 Pages Posted: 7 Feb 2016
Date Written: October 4, 2014
This paper attempts to define the relationship that exists among risk management, accounting, and internal control. The links between surrounding problems that these levels have and how they affect the organization performance and objective indicators make the focus of the study. The research confirms that tracking risk is a key element to quantify it and the not for profit organizations risk appetite is decided by the means of the organization objectives rather than its current financial net worth. Furthermore, the study underlines the importance of accrual basis accounting, as well as the collaboration between internal audit and risk management departments. The paper comes up with six recommendations; first IPSAS adaption system should be viewed under a medium – long term perspective. Proper staff involvement and preparation can be done more often through online courses and inter offices experience exchange seminars. Decision making for copartners and contractors can be made by the central bureau in order to diminish staff exposure to security risk. Siblings organizations can find useful a co sourcing of auditors increasing such way info sharing and collaboration between their internal audit and risk management departments. Long term operational strategies should include permanent risk while short term ones should consider any case as unique. The transparency towards donors can be increased through the IPSAS financial system in use, on time reports and sharing real challenges faced in place. The last recommendation regards to the creation of a corporate fund for a smother operational respond to unexpected emergencies.
Keywords: Internal Audit, Risk Management, IPSAS, Risk Appetite, WFP, UNHCR.
JEL Classification: D89,L3,L31.L39,M4,O19,O55
Suggested Citation: Suggested Citation