Operational Resilience Audit

Operational Resilience Audit Questionnaires and Checklist

Sustain Phase

Operational Resilience Planning Methodology

Operational Resilience Planning Methodology:  The three phases are "Plan", "Implement", and "Sustain."  Each phase has five implementation stages.  

Click each phase's five stages to learn more about the detailed questions and how the checklist supports them.  Note that there is overlap for some of the stages in terms of content, as you will never be auditing all 15 stages concurrently during the maturity of the organisation OR program.

The rationale is that you, as a reviewer or auditor, will not be conducting the audit of review for all three phases together. Hence, the essential controls still need to be embedded in several stages.

Questionnaires and Checklist "Sustain" Phase	Introduce Cultural Change	Develop Communication Strategy	Implement Training and Awareness	Provide Self-assessment	Conduct Independent Quality Review

Find out more about Blended Learning ORA-5000 [ORA-5] & ORA-300 [ORA-3]

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Emerging Trends in Operational Resilience Auditing: A 2024 Report

Operational resilience has become a top priority for organizations across industries, prompting the rise of specialized auditing practices.

This report explores key emerging trends shaping the landscape of operational resilience auditing in 2024.

1. Increased Regulatory Scrutiny

Regulatory bodies worldwide are implementing stricter requirements for operational resilience, mandating regular audits and stress testing exercises. This drives demand for skilled auditors familiar with relevant regulatory frameworks.

2. Focus on Third-Party Risk Management

Modern businesses' interconnectedness amplifies third-party vulnerabilities' impact. Audits increasingly scrutinize third-party contracts, risk management procedures, and control environments to ensure supply chain resilience.

3. Integration with Cybersecurity Audits

The convergence of cyber and operational risks necessitates combined audits examining IT infrastructure, data security, and incident response capabilities alongside traditional operational resilience assessments.

4. Adoption of Technology-Assisted Auditing

Advanced analytics, artificial intelligence (AI), and automation are transforming how audits are conducted. These tools enable auditors to analyze vast datasets, identify hidden patterns, and streamline data collection, freeing time for deeper analysis and judgment.

5. Shift Towards Scenario-Based Testing

Static assessments give way to dynamic scenario-based testing that simulates real-world disruptions. This approach helps organizations refine their resilience plans and identify vulnerabilities under pressure.

6. Evolving Threat Landscape

Auditors must stay informed about emerging threats like climate change, geopolitical instability, and cyberattacks, continuously adapting their methodologies to address these dynamic risks.

7. Growing Demand for Skilled Professionals

The burgeoning field of operational resilience auditing creates a talent gap.

Training and certification programs are crucial to upskill existing professionals and attract new talent to meet the rising demand.

8. Emphasis on Business Continuity Management (BCM) Integration

Effective operational resilience relies on integrating resilience principles into existing BCM frameworks.

Auditors focus on ensuring BCM programs align with organizational objectives and address emerging threats.

9. Continuous Improvement and Learning

Operational resilience is an ongoing journey, not a destination.

Audits should emphasize the importance of continuous improvement, learning from incidents, and adapting resilience plans based on evolving threats and organizational changes.

10. International Collaboration and Harmonization

Harmonization across jurisdictions and industries is critical as regulations and best practices evolve.

International collaboration among regulators, auditors, and professional bodies is gaining momentum to facilitate knowledge sharing and consistent approaches.

By staying informed about these trends, audit professionals can adapt their practices, embrace new technologies, and contribute to building robust and adaptable operational resilience for organizations in the face of ever-changing risks.

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Internal vs External OR Auditing: Roles, Responsibilities and Ethics

While internal and external auditors contribute to assessing and strengthening operational resilience, their roles, responsibilities, and ethical considerations differ significantly.

Hence, it is helpful to understand the differences in roles, responsibilities and ethical considerations between IA and EA.

Internal Auditors (IA)

Roles of IA

• Independent assurance provider. Evaluating the effectiveness of existing resilience programs and controls within the organization.
• Risk consultant. Collaborating with business units to identify and mitigate operational risks impacting resilience.
• Process improvement advocate. Proposing recommendations to enhance OR posture and optimize processes.
• Change agent. Driving improvements in risk management culture and awareness across the organization.

Responsibilities of IA

• Conducting risk assessments and audits focused on operational resilience.
  Testing controls and processes designed to mitigate identified risks.
• Evaluating the adequacy and effectiveness of resilience plans and preparedness.
• Reporting findings and recommendations to management and relevant stakeholders.
• Monitoring and measuring the effectiveness of implemented improvements.

Ethical Considerations of IA

• Maintaining independence and objectivity: Avoiding undue influence from management or bias towards specific outcomes.
• Confidentiality: Protecting sensitive information obtained during audits while ensuring adequate reporting for oversight purposes.
• Competence and professional diligence: Continuously updating knowledge and skills to perform audits effectively and adhere to professional standards.
• Acting in the organisation's best interests: Balancing adherence to regulations with supporting the organization's long-term sustainability and ethical conduct.

External Auditors (EA)

Roles of EA

• Independent opinion provider: Offering an external perspective on the organization's overall risk management and resilience posture.
• Regulatory compliance assurer: Verifying adherence to relevant regulations and standards impacting operational resilience.
• Stakeholder assurance provider: Building confidence for investors, creditors, and other stakeholders regarding the organization's resilience capabilities.

Responsibilities of EA

• Conducting audits focused on specific regulatory requirements or contractual obligations related to operational resilience.
• Assessing the design and effectiveness of controls based on agreed-upon procedures.
• Reporting findings and opinions to relevant stakeholders, potentially including public disclosure.
• May not delve as deeply into operational details as internal auditors.

Ethical Considerations of EA

• Maintaining independence and objectivity. Avoiding conflicts of interest and undue influence from clients or regulators.
• Professional scepticism. Maintaining a critical questioning stance ensures audit conclusions are based on accurate and sufficient evidence.
• Confidentiality. Protecting sensitive information obtained during audits while fulfilling reporting requirements to designated parties.
• Communication and transparency. Communicating limitations and uncertainties associated with their audit findings and opinions.

Key Differences

• Focus.  Internal auditors focus on broader operational resilience within the organisation, while external auditors may have a narrower scope dictated by regulations or contracts.
• Reporting. Internal auditors report primarily to management and internal stakeholders, while external auditors report to their clients and potentially publicly.
• Depth of engagement. Internal auditors typically understand the organisation's internal workings and may conduct more in-depth assessments.
• Impact. Internal auditors directly impact internal change and improvement within the organisation, while external auditors provide assurance and may trigger regulatory consequences.

Collaboration and Coordination

While their roles and responsibilities differ, effective operational resilience relies on collaboration and coordination between internal and external auditors.

• Sharing information and insights. Internal auditors can provide external auditors valuable context and understanding of the organisation's operations and risk landscape.
• Joint assessments. In some cases, collaborative audits can leverage the strengths of both parties for a more comprehensive evaluation.
• Mutual respect and understanding. Recognising the value each type of auditor brings to building a robust operational resilience framework.

By understanding internal and external auditors' different roles, responsibilities, and ethical considerations, organisations can effectively leverage their combined expertise to assess and strengthen their operational resilience posture.

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Roles and Responsibilities of Operational Resilience Auditors

Operational resilience auditors ensure organisations can withstand disruptions and maintain critical operations. Their responsibilities involve diverse tasks, requiring a unique blend of technical expertise, communication skills, and problem-solving abilities.

Here is a breakdown of their key roles and responsibilities:

Assessment and Evaluation

• Identify and assess potential threats.   
  • Analyse various sources to understand internal and external factors that could disrupt critical operations.
    
    
• Evaluate existing resilience programs. 
  • Assess the effectiveness of existing controls, plans, and processes in mitigating identified risks.
    
    
• Perform risk assessments. 
  • Utilise various methodologies (e.g., scenario-based, data-driven) to quantify the likelihood and impact of potential disruptions.
    
    
• Conduct audits and investigations.
  • Analyse documentation, interview stakeholders, and test controls to evaluate program effectiveness and identify vulnerabilities.

Planning and Implementation

• Develop and recommend improvements. 
  • Based on their findings, propose enhancements to existing programs, controls, and processes.
    
    
• Collaborate with stakeholders. 
  • Engage with business units, risk management teams, and senior leadership to understand needs and ensure aligned recommendations.
    
    
• Develop and implement audit plans. 
  • Design the scope, objectives, and methodologies for conducting operational resilience audits.
    
    
• Manage and lead audit teams. 
  • Build, train, and motivate teams with diverse skill sets to achieve audit objectives effectively.

Communication and Reporting

• Communicate effectively. 
  • Present audit findings and recommendations clearly and concisely to various stakeholders, tailored to their needs and knowledge level.
    
    
• Prepare audit reports. 
  • Draft comprehensive and actionable reports documenting findings, conclusions, and recommendations, adhering to relevant standards and regulations.
    
    
• Facilitate discussion and action. 
  • Collaborate with stakeholders to address concerns, answer questions, and implement agreed-upon actions.

Continuous Improvement and Development

• Monitor and update assessments.
  • Keep updated with evolving threats, regulatory changes, and industry best practices, and refine assessments and recommendations accordingly.
    
    
• Stay informed about emerging trends. 
  • Learn and adapt continuously to new technologies, techniques, and methodologies in operational resilience auditing.
    
    
• Share knowledge and expertise. 
  • Contribute to the profession's development by sharing best practices, participating in professional organisations, and mentoring others.

Additional Responsibilities and Specific Role

• Third-party risk assessments. 
  • Evaluate the resilience of critical vendors and suppliers.
    
    
• Regulatory compliance audits. 
  • Ensure adherence to relevant regulations impacting operational resilience.
    
    
• Information security audits. 
  • Assess the cybersecurity posture of systems and controls related to operational resilience.

Summing Up ...

Overall, operational resilience auditors are critical in protecting organisations from disruptions and ensuring business continuity.

They require a comprehensive skill set, critical thinking abilities, and the ability to effectively communicate complex information to diverse stakeholders.

As the field evolves, their responsibilities will continue to adapt and expand, requiring continuous learning and development to address emerging challenges and effectively contribute to organisational resilience.

	Please feel free to send us a note if you have any of these questions.

A Manager's Guide to Audit and Review Your Operational Resilience Program

[Book is available on 1 July 2024]

An operational resilience audit is a comprehensive assessment and evaluation process conducted within an organization to determine its ability to withstand and recover from various disruptions while maintaining critical business functions. 

This audit aims to identify vulnerabilities, assess risks, and evaluate the effectiveness of strategies and processes to ensure continuity in the face of adverse events.

The ORA book covers the components of operational resilience audit, and it includes:

• Audit Planning
• Data Collection
• Data Analysis
• Summarise Findings
• Audit Reporting
• Audit Challenges

This book provides the principles and steps of the Operational Resilience (OR) Audit and shows you how to apply them in developing an effective and detailed operational resilience plan. It also includes a practical “fast track” how-to-do-it template to assist persons without previous experience in Operational Resilience planning in preparing their Operational Resilience plan.

The BCM Series presents a step-by-step program to equip your organization with a complete understanding of the process of Operational Resilience planning.  It also provides detailed documentation, explanations, and templates that are invaluable reference materials.  This book series will support some critical concepts in OR, such as crisis and incident management, business continuity, IT disaster recovery, cyber security, and supply chain resilience.

ISBN: 978-981-18-9326-1

Published Year: 2024

A Manager's Guide to Audit and Review Your Operational Resilience Program

• An understanding of the many concepts and definitions of operational resilience (OR)
• A good practice and recognized OR Planning process or methodology with a robust framework in conceptualizing, developing, and maintaining an effective and efficient OR Programme.
• A structural and procedural approach to developing an OR Plan for the entire business infrastructure and services that are required for its critical business services
• Practical OR Guidelines, considerations, practices, and samples beneficial for OR practitioners to facilitate and manage the OR Planning process.
• Practical management justifications and OR services sourcing approach to assist new OR practitioners in initiating management support for implementing the OR Plan.

This book is handy for anyone who needs to conceptualize and develop an OR Plan. It provides an extensive framework for identifying and evaluating OR disruptions, impact tolerance due to the interruption, OR requirements, and prioritization.

At the same time, this book follows a structural development approach that will save time and cost in developing a cost-effective OR Plan that addresses all aspects of the business requirements for OR services.

Purchase [Click book icon] your copy of "A Manager's Guide to Implement Your Operational Resilience" now.

More Information About Blended Learning Operational Resilience Audit (ORA) Courses

BCM Institute offers two levels of OR auditing courses: ORA-3 Blended Learning ORA-300 Operational Resilience Audit Specialist and the ORA-5 Blended Learning ORA-5000 Operational Resilience Audit Expert.

Please feel free to send us a note if you have any questions.