1. Murdoch University RISK MANAGEMENT Senate Induction

2. RISK MANAGEMENT – Presenter’s Background FIIA, FCPA, Registered Company Auditor, CD FIIA, FCPA, Registered Company Auditor, CD 6 years lecturing & tutoring at Edith Cowan University 6 years lecturing & tutoring at Edith Cowan University Board of Governors of the IIA for 13 years & presented IIA training courses on “Risk Management, Introduction to Auditing, Re- inventing Internal Audit, Operational Auditing” Board of Governors of the IIA for 13 years & presented IIA training courses on “Risk Management, Introduction to Auditing, Re- inventing Internal Audit, Operational Auditing” 25 years auditing experience in Government & Commercial sector and Deputy State Manager of the Health Insurance Commission in WA 25 years auditing experience in Government & Commercial sector and Deputy State Manager of the Health Insurance Commission in WA

3. PRESENTATION OBJECTIVES what is Risk ? what is Risk ? what is Risk Management ? what is Risk Management ? who is responsible for Risk Management ? who is responsible for Risk Management ? how do we manage Risks ? how do we manage Risks ? the benefits of Risk Management the benefits of Risk Management accountability for Risk Management accountability for Risk Management success factors in implementing Risk Management success factors in implementing Risk Management embedding Risk Management embedding Risk Management conclusion & questions conclusion & questions

4. What is Risk ? Risk if unmanaged, may prevent an Organisation from achieving corporate goals – it’s what keeps us awake at night ! Risk if unmanaged, may prevent an Organisation from achieving corporate goals – it’s what keeps us awake at night ! Risk is not always a bad thing Risk is not always a bad thing Risk can be strategic or operational Risk can be strategic or operational

5. Examples of Risk Political & Relationship Political & Relationship Customer Service Customer Service Reputation/Ethics Reputation/Ethics Competition & Marketing Competition & Marketing Academic Quality Academic Quality Intellectual Property Intellectual Property Business Continuity Business Continuity Financial & Fraud Financial & Fraud Technological Technological Legal Legal Asset Utilisation & Security Asset Utilisation & Security Human Resource & Industrial Relations Human Resource & Industrial Relations

6. What is Risk Management ? What is Risk Management ? Assess the risk = Likelihood * Impact Assess the risk = Likelihood * Impact Risk Management Options are Risk Management Options are - accept the risk (do nothing) - transfer the risk via insurance or contract - eradicate the risk - manage the risk by putting in place risk reduction strategies Monitor & Review Risk in priority order & with cost benefit considerations Monitor & Review Risk in priority order & with cost benefit considerations

7. Initial Risk = Impact * Likelihood = High Risk Less : Risk Reduction Processes regular preventative maintenance regular preventative maintenance adherence to speed limit adherence to speed limit attendance at a defensive driving course attendance at a defensive driving course seat belts are always worn seat belts are always worn insurance policy insurance policy Residual Risk =Low Risk rating Action Required – Accept the Low Risk level Car Accident Risk

8. Who is Responsible for Risk Management ? Everyone ; & Everyone ; & All the time as the Risk environment is dynamic not static All the time as the Risk environment is dynamic not static

9. Risk Management Benefits Helps prioritise our limited resources into the areas of greatest need Helps prioritise our limited resources into the areas of greatest need Improves our ability to achieve our Corporate Goals Improves our ability to achieve our Corporate Goals Represents good Corporate Governance – internal & external benefits Represents good Corporate Governance – internal & external benefits Favourable impact on Insurance premiums Favourable impact on Insurance premiums

10. Risk Management Reporting ? Each operational area should produce & annually review their plan & “sign off” Each operational area should produce & annually review their plan & “sign off” Risk Management Plan & Register should be annually reported to the Senior Executive Group & to the Senate Risk Management Plan & Register should be annually reported to the Senior Executive Group & to the Senate The Audit & Risk Committee will oversight Risk Management activity The Audit & Risk Committee will oversight Risk Management activity

11. Critical Success Factors have ongoing support from the Senate & the Senior Executive Group have ongoing support from the Senate & the Senior Executive Group

12. Embedding Risk Management Risk management belongs to everyone and all the time Risk management belongs to everyone and all the time The Corporate Plan should deal with Risk (Threats) The Corporate Plan should deal with Risk (Threats) Project submissions to Senate should deal with Risk Project submissions to Senate should deal with Risk School/Divisional papers should deal with Risk School/Divisional papers should deal with Risk

13. CONCLUSION & QUESTIONS what is Risk ? what is Risk ? what is Risk Management ? what is Risk Management ? who is responsible for Risk Management ? who is responsible for Risk Management ? how do we manage Risks ? how do we manage Risks ? benefits of Risk Management benefits of Risk Management accountability for Risk Management ? accountability for Risk Management ? success factors in implementing Risk Management success factors in implementing Risk Management embedding Risk Management embedding Risk Management

14. Murdoch University INTERNAL AUDIT Senate Induction

15. PRESENTATION OBJECTIVES what is Internal Audit ? what is Internal Audit ? what is the role of the Audit & Risk Management Committee ? what is the role of the Audit & Risk Management Committee ? the difference between Internal & External Audit ? the difference between Internal & External Audit ? accountability requirements for Internal Audit accountability requirements for Internal Audit the significance of the Annual Audit Plan the significance of the Annual Audit Plan what are the different types of audit ? what are the different types of audit ? conclusion & questions conclusion & questions

16. What is Internal Audit ? Audit is the second oldest profession in the world Audit is the second oldest profession in the world Internal Audit is an independent/unbiased review activity Internal Audit is an independent/unbiased review activity Internal Audit has changed from being a “bloodhound” looking solely at financial compliance issues to internal consultants looking at all operational issues on a risk rather than a time cycle basis Internal Audit has changed from being a “bloodhound” looking solely at financial compliance issues to internal consultants looking at all operational issues on a risk rather than a time cycle basis Internal Audit is a major Corporate Governance mechanism Internal Audit is a major Corporate Governance mechanism

17. What is the Role of the Audit & Risk Management Committee ? Prescribed in the Committee’s Terms of Reference Prescribed in the Committee’s Terms of Reference

18. Differences between Internal & External Audit External Audit’s primary focus is on the truth and fairness of the annual financial statements – this is primarily a financial compliance focus External Audit’s primary focus is on the truth and fairness of the annual financial statements – this is primarily a financial compliance focus Internal Audit focuses on financial issues but also on operational issues such as economy, efficiency & effectiveness and on legal compliance and IT issues ? Internal Audit focuses on financial issues but also on operational issues such as economy, efficiency & effectiveness and on legal compliance and IT issues ?

19. Accountability requirements for Internal Audit – WHO AUDITS THE AUDITORS ???? annual review of work by the external auditor annual review of work by the external auditor Peer Review every 4-5 years Peer Review every 4-5 years ongoing review by the Deputy Vice Chancellor ongoing review by the Deputy Vice Chancellor quarterly & annual review by the Audit & Risk Management Committee quarterly & annual review by the Audit & Risk Management Committee client surveys are done on the completion of each audit client surveys are done on the completion of each audit

20. The significance of the Annual Audit Plan represents a defensible coverage of major risk areas represents a defensible coverage of major risk areas allows the Committee to monitor the performance of Internal Audit allows the Committee to monitor the performance of Internal Audit has a nexus with the high risk areas contained in the Corporate Plan has a nexus with the high risk areas contained in the Corporate Plan

21. What are the different types of Audit ? Financial compliance Financial compliance Operational – efficiency, economy & effectiveness Operational – efficiency, economy & effectiveness Legal Compliance Legal Compliance IT IT Comprehensive Comprehensive

22. Conclusion & Questions what is Internal Audit ? what is Internal Audit ? what is the role of the Audit & Risk Management Committee ? what is the role of the Audit & Risk Management Committee ? the difference between Internal & External Audit ? the difference between Internal & External Audit ? accountability requirements for Internal Audit accountability requirements for Internal Audit the significance of the Annual Audit Plan the significance of the Annual Audit Plan what are the different types of audit ? what are the different types of audit ? conclusion & questions conclusion & questions

23. Andrew Burchfield’s Contact Details Telephone – 9360 6167 Telephone – 9360 6167 Email – a.burchfield@murdoch.edu.au Email – a.burchfield@murdoch.edu.aua.burchfield@murdoch.edu.au Fax - 9360 7286 Fax - 9360 7286 Murdoch Home Page re Internal Audit & Risk – http://www.murdoch.edu.au/vco/audit/audit.html Murdoch Home Page re Internal Audit & Risk – http://www.murdoch.edu.au/vco/audit/audit.html