Modern thinking about risk would suggest that the university's most important asset is its reputation. Without a good reputation, staff will be hard to attract, endowments will be difficult to obtain, and the government might be reluctant to fund the operation. Without a good reputation for offering a safe and learning environment, parents would be reluctant to send their children. In so many organizations, especially the public sector, reputation is everything. Once the trust between organization and citizen is lost, operations become very difficult.
Many internal auditors take an implicit path to reputation risk.
Internal audit risk models often have some expression of political risk, public confidence, or adverse publicity as one of the risk factors in their organization's risk management model. This is a good beginning, but to ensure that reputation is recognized as a valuable and irreplaceable soft asset would be an improvement. Summary The key to successful internal auditing or risk management is a thorough risk assessment. Including soft assets as a specific step in your thinking process will make you a better auditor and a better risk manager. Managing the risk to soft assets is a natural and necessary extension of managing the risk to traditional hard assets.