What is the role of an internal audit in risk management?

The role of an internal audit in risk management is fundamentally about reviewing and assessing risk management processes and controls. Internal auditors are tasked with providing an independent evaluation of the organization's risk management framework, which includes identifying potential risks, evaluating how these risks are managed, and ensuring that the controls in place are effective and adequate to mitigate those risks.

Through systematic examination, internal audits help organizations understand whether they are exposed to significant risks and whether the strategies in place for managing those risks align with the organization's objectives. This process is crucial for accountability and governance, allowing organizations to ensure compliance with regulations and to improve operational efficiency.

The other choices do not align with the primary functions of an internal audit. Preparing financial statements is more related to accounting functions, evaluating marketing strategies pertains to the marketing department, and designing new products and services falls under product development. Therefore, the focus of an internal audit on risk management processes is vital for safeguarding the organization against potential risks and assuring stakeholders of its integrity and stability.