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CS Professional · Internal and Forensic Audit · Internal Audit Tools and Techniques

An internal auditor at Narmada Cements uses a heat map showing the company's risks plotted by likelihood and impact. A risk plotted at high likelihood and high impact would normally be treated as:

A risk in the high-likelihood, high-impact zone of a heat map is a top-priority risk. It needs immediate audit attention and management response, whereas low-rated risks can be reviewed less often or accepted.

  1. AA top-priority risk needing immediate audit attention and management responseCorrect
  2. BA low risk that can be accepted without review
  3. CA risk to be excluded from the audit plan
  4. DA risk to be covered only in the next three-year cycle

Explanation

On a heat map the high-likelihood, high-impact corner is the critical zone. It calls for priority audit coverage and management action. Low-risk treatment applies to the opposite corner.

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