Risk Assessment Objective Perform a risk assessment and review conflicts of interest. The university environment has some unique inherent risks that make the job of managing financial and compliance risks more challenging. The key is to recognize these inherent risks and manage them. It is cost-prohibitive . The objective is to find an optimal level of controls for an acceptable level of risk.
Management can bypass or override the internal controls.
Employees may collude with each other. Human error may occur. A Conscious Decision To properly manage their operations, managers need to determine the level of financial and compliance risk they are willing to assume. Risk assessment is one of management's responsibilities and enables management to act pro-actively in reducing unwanted surprises. Failure to consciously manage these risks can result in a lack of confidence that financial and compliance goals will be achieved.