IMPACT OF INTERNAL AUDIT ACTIVITY ON RISK MANAGEMENT WITHIN CONSTRUCTION ORGANIZATION

Abstract

In a competitive market, it is increasingly important to implement, in each company, all the prerogatives of risk management and control and internal control systems. In this context, the internal audit (IA) function appears as a lever that through its assurance and consulting missions can help companies increase their value based on a risk management approach. Starting from the objective of this paper to identify the relationship that exists between IA and risk management, from the perspective of its improvement, an empirical analysis has been carried out for 18 private companies in the field of construction in Romania. The results have shown that risk management consulting activities are increasingly in demand and that factors such as internal auditor training and experience are very important in creating value for companies. The research has shown that internal auditors and managers in these construction companies believe that the two ways by which IA creates added value are by ensuring that major risks are properly managed and by ensuring that risk management and internal controls are working effectively.