Asking the right question is key to identifying the primary risks in a new business process. Discover which of these 4 questions an internal auditor should focus on.
Table of Contents
Question
Which of the following questions would provide the most important information when examining the key risks of a new business process?
A. What are the procedural steps?
B. Why does the new process exist?
C. Who are the personnel involved?
D. What are the primary inputs and outputs?
Answer
The most important question to ask when examining the key risks of a new business process is:
D. What are the primary inputs and outputs?
Explanation
To thoroughly assess the risks of a new business process, an internal auditor needs to focus on the most critical elements that will determine if the process achieves its objectives and operates effectively. The primary inputs and outputs are the most essential components to evaluate.
Inputs are the resources, data, and information that flow into the process to be transformed or utilized. Outputs are the end products, deliverables, and results the process generates. If key inputs are missing, inaccurate, or unreliable, it jeopardizes the entire process. If the outputs don’t meet required standards or stakeholder needs, the process fails in its ultimate purpose.
While the other questions provide useful context, they are less critical for risk assessment:
A) Procedural steps outline how the process works but don’t identify what’s most important.
B) The reason for the process gives background but doesn’t pinpoint potential failure points.
C) Knowing the personnel involved provides helpful information but is secondary to evaluating the process itself.
By zeroing in on the inputs and outputs, the auditor can efficiently target their examination on what matters most – the critical dependencies and requirements that the process hinges upon. This allows the auditor to identify the greatest risks that could undermine process integrity and performance.
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