Risk management in internal audit

The internal audit profession has developed and taken shape according to the needs of organizations and developments in the business world since the years it first appeared. The conditions of businesses as well as the failure of the internal audit to prove its inherent potential led to exploration of new approaches to increase the internal audit?s added value. During this process of change and embodiment, the focus and direction of internal audit altered and the transition was made from the traditional internal audit approaches to the risk-based audit approach which focuses on high-risk areas primarily.View point of the internal audit to the risk and controls which are parts of risk management changed significantly by risk-based auditing approach and the internal auditors were presented an opportunity to create more value. Together with the implementation of this approach, auditors started to strive for a better understanding of the enterprises and their goals and examine how the administration dealt with the risks, and they became more sensitive to any change occurring within and around the enterprise. Risk-based internal audit, in contrast to the internal audit approaches focusing only the system, policies, plans and procedures, focuses on the risks facing enterprises in the future, not past by acting with the consciousness that each enterprise is exposed to different risks, with different severity levels of each of these risks. With this approach, the internal auditors catch the opportunity to perform business objectives, to convert the risks to the opportunities and develop the activities.This thesis on ?The Risk-Based Internal Audit? consists of three chapters. In the first chapter titled as ?Internal Control System and Internal Audit Function?, the basic concepts relating to the internal control system and internal audit, evolution since the years of its first emergence and the legal regulations related to internal audit in the world and Turkey are described.The second chapter titled as "Risk Based Internal Audit as a Tool for Corporate Risk Management" includes basic information related to the risk, risk management and corporate risk management. Also, the conditions predisposing to risk-based audit and risk-based audit phases are are mentioned.In the third chapter titled as ?A Research to Determine the Level of Financial Risk in the Scope of Risk Based Internal Audit for the Companies Registered in Manufacturing Index -The ISE?, a survey related to the impact of risk based internal audit onto the level of financial risk of the companies and its analysis are presented.Key Words: Internal Audit, Risk Management, Risk Based Internal Audit, Financial Risk.