Draft and implement Risk Control Matrix: Identify potential risks across various business processes, functions, and objectives. Group similar risks into categories. For each identified risk, determine the existing controls in place to mitigate or prevent it. Evaluate the likelihood (probability) and impact (severity) of each risk. Clearly assign ownership for each risk and its associated controls. Document the identified risks, their corresponding controls, risk scores, and owners in a structured matrix format [Risk control Matrix (RCM)].
Perform Risk Assessment, Draft and implement Risk Control Matrix Regularly review and update the RCM to reflect changes in the business environment, new risks, or changes in control effectiveness. Outline what the testing aims to achieve, such as verifying control effectiveness, identifying gaps, or ensuring compliance. Choose appropriate testing procedures based on the nature of the controls and the risks they address. Collect sufficient evidence to support the testing procedures. Assess how well the controls are operating to mitigate the identified risks.
Identify any gaps or weaknesses in the control environment. Develop recommendations for addressing identified gaps and deficiencies. Communicate the results of the testing to relevant stakeholders, including management and those responsible for the controls. Follow up on the recommendations to ensure that identified gaps and deficiencies are addressed and that the RCM is updated as needed.