Risk management in audit projects

<p>&nbsp;</p><p>This research is devoted to the project risk management in audit projects. We can consider the audit as a project, because it has all basic features of a project &ndash; it is a temporary enterprise designed to create unique products, services, or results.</p><p>Therefore, we can apply the basic techniques of project management, including the management of project risk. Elaboration of the elements of risk management will significantly improve the quality of audits, optimize usage of project resources, which could increase profits.</p><p>The main aim of this research is developing recommendations on risk management in audit projects. This will induce improving the effectiveness of the companies&rsquo; work and lead to better results. Within this purpose the following tasks were implemented:</p><ul><li>to investigate the existing approaches of risk management of audit projects;</li><li>to identify and classify potential risks that could affect the outcome of the&nbsp; audit projects;</li><li>to conduct qualitative and quantitative assessment in order to recognize clearly the most significant risks;</li><li>to develop a system of necessary arrangements of risks&rsquo; reduction;</li><li>to develop an organizational scheme of risk management for a specific project.</li></ul><p>For the first part of the project, which represents a theoretical basis and an overview of the main concepts, it is necessary to analyze secondary sources of information, such as scientific literature devoted to different approaches to risk management or basic principles of audit. The key peculiarity of this work is that it is at the junction of two different branches of science - risk management in the project management on the one hand and the audits on the other. As a result, for writing a high-quality work it is necessary to analyze both components. Foreign and domestic scientific achievements on this topic will allow to describe key features of assessment of audit risks in audit projects.</p><p>Further, the identification, qualitative and quantitative risk assessment of audit projects of Ernst and Young company was carried out. According to the results of this work, all potential risks that could affect the result of a project or its individual elements were identified and systematized, risk register was compiled. For the second part of the project, we will use a variety of methods of collecting and analyzing the primary information. First, to characterize companies surveyed and the stages of the audit we will use analysis of documentation on current projects and programs, job descriptions, and other forms of auditor company&#39;s documents on the one hand and the audited company on the other hand. The mandatory methods of collecting information are survey and interviews with company&rsquo;s staff, for a deeper understanding of certain issues. For this purpose we will use the ability to access information on real projects of company Ernst and Young.</p><p>According to the analysis, the most serious are risks of leaders&rsquo; of the functional units opposition, lack of information, incorrect assessment of the risks of personnel qualifications required, risks of failure to submit information, risks of temporary disposal of one of the project staff, or leaving of a high-qualified employee. All these risks have a significant impact on the timing and cost of a project. To address these issues a company can resort to project risks reduction strategies and active acceptance.</p><p>Taking into account the findings of the risk-assessment, we have developed recommendations for the implementation of risk management system for the Ernst and Young company in the following areas:</p><ul><li>recommendations for the documentation practices in audit project;</li><li>recommendations for the introduction of elements of risk management in the field of personnel management;</li><li>recommendation for the introduction of elements of risk management in the project schedule;</li><li>recommendations for the implementation of various measures for risk management.</li></ul>