Risk Audit and Review Documentation

Risk Audit and Review Documentation Guide

What is Risk Audit and Review Documentation?

Risk audit and review documentation refers to the formal records created during systematic examinations of risk management activities. These documents capture the evaluation of how effectively risk processes are being implemented compared to established plans and standards.

Why is Risk Audit and Review Documentation Important?

Risk audit and review documentation is critical because it:

• Provides evidence of compliance with organizational policies and regulatory requirements
• Creates an accountability trail for risk management decisions
• Helps identify gaps in risk management processes
• Serves as a historical record for future reference and learning
• Supports continuous improvement of risk management approaches
• Demonstrates due diligence to stakeholders and auditors

Key Components of Risk Audit and Review Documentation

1. Audit Charter and Plan: Outlines the scope, objectives, and methodology of the risk audit

2. Audit Findings: Documents identified issues, deviations, and areas of concern

3. Recommendations: Suggests improvements to address identified weaknesses

4. Management Responses: Records how management plans to address findings

5. Follow-up Actions: Tracks implementation of recommended changes

6. Evidence Collection: Maintains supporting materials like interview notes, process observations, and sampled records

How Risk Audits and Reviews Work

The Risk Audit Process:

1. Planning: Define audit objectives, scope, and methodology

2. Information Gathering: Collect relevant documentation and interview key stakeholders

3. Analysis: Evaluate the effectiveness of risk management processes

4. Reporting: Document findings and recommendations

5. Follow-up: Monitor implementation of recommended changes

Types of Risk Reviews and Audits:

• Compliance Audits: Assess adherence to regulatory requirements and internal policies

• Performance Audits: Evaluate the efficiency and effectiveness of risk management processes

• Process Audits: Examine specific risk management activities for improvement opportunities

• Regular Reviews: Scheduled examinations of the risk register and response plans

Exam Tips: Answering Questions on Risk Audit and Review Documentation

1. Understand the Difference Between Audits and Reviews:
• Audits are formal, independent assessments against established standards
• Reviews are typically internal evaluations of risk management effectiveness

2. Know the Key PMI-RMP Audit Documentation:
• Risk management plan
• Risk register
• Issue logs
• Audit reports and findings
• Corrective action plans
• Meeting minutes related to risk discussions

3. Remember the Purpose:
• Focus on how audits and reviews improve risk management processes
• Understand that documentation provides evidence of due diligence

4. Apply Audit Principles:
• Independence: Auditors should be separate from the activities being audited
• Evidence-based: Conclusions must be supported by factual information
• Systematic: Following a structured approach

5. Question Strategy:
• For scenario-based questions, look for indications of audit or review activities
• Pay attention to whether the scenario involves formal audits or informal reviews
• Consider the timing of audits in the project lifecycle
• Look for questions about documenting corrective actions

6. Common Exam Traps:
• Confusing audit findings with risk responses
• Mixing up preventive and corrective actions
• Overlooking the documentation requirements for different types of audits

7. Focus on Value:
• Emphasize how audit documentation contributes to project success
• Understand the role of audit documentation in organizational learning

8. Remember Stakeholder Communication:
• Know who should receive audit reports and findings
• Understand how findings should be communicated to different stakeholders

Example Question and Analysis:

Question: During a risk audit, several discrepancies are found between planned and actual risk responses. What should be documented first?

Analysis: This question tests your understanding of documentation priorities. The correct answer would likely focus on documenting the specific findings with supporting evidence before moving to recommendations or corrective actions. The audit trail must first establish what was found before addressing how to fix it.