Internal Controls Design
consulting and research for internal control with risk management
The new book: "A pocket guide to risk mathematics: key concepts every auditor should know"
This book is a breakthrough for auditors everywhere who have to audit risk analyses of any kind, especially if the analyses are quantified. It's also a breakthrough for organizations who rely on their internal auditors to do those audits. It's a breakthrough because it explains all the key concepts without algebra or calculus, and explains mistakes to look for, how to find them, and what to suggest instead.
The key point is that auditors (and people in some other roles too) do not need to be able to do the mathematics themselves. What the auditor needs is to be able to interview experts and understand more of their documents, and ask smart questions about the things that are important but difficult to do.
Some mistakes in risk analysis are in the detailed workings or program code, but others are conceptual. Often the conceptual mistakes are the big ones (like the ones that contributed hugely to the 2007-2009 credit crunch). Auditors who use this new book still cannot check algebra or program code, but they can go after the conceptual problems and so help the protect the world's economic system. They can also understand what has been done by technical reviewers.
For auditors who want this ability there is now, at last, an easier alternative to lengthy mathematics courses featuring textbooks with hundreds of worked examples and problems to solve. Because the hard symbolic manipulation is left out, the book can cover a huge number of important ideas, and make them clear in principle and through simple examples.
Not everyone is capable of self study, or interested, but for those who can sit down and learn from a book this one will open the door to some interesting reviews and will be a huge career boost. All you need to do is read it for 20 to 30 minutes a day and keep going. As each new concept slots into place you will be able to understand more and do more.
I think most people will be surprised at just how much they didn't know before they started reading. Risk analysis will never look the same again, and mathematical experts like actuaries will not seem quite so intimidating.
I've written a short article called What can auditors do when they have read 'A pocket guide to risk mathematics'? that explains in more detail the sort of reviews that should be possible and what should be avoided.
Here's some more information
Why your organization should buy this book
Your organization has good reasons for getting this book for you. To have it added to a corporate library or persuade your boss you might offer a justification something like this:
'A pocket guide to risk mathematics: key concepts every auditor should know' by Matthew Leitch covers a lot of key concepts and issues that the audit team needs to understand to audit risk management effectively and so comply with international internal auditing standards (specifically the IIA's standard 2120). It is a practical alternative to lengthy mathematical books not designed for auditors. We need access to this book.
If that doesn't work I suggest you buy it yourself anyway; the career benefit is mainly yours.
Buying multiple copies
This book is a paperback in a convenient pocket size and much cheaper than my first book specifically so that more people can get hold of it, carry it with them, and put that knowledge into their heads. I've worked very hard with Wiley's designers to make this book as easy and enjoyable to read as the content will allow.
From 18th June 2010 the book is also available as an ebook in various formats, which will be more convenient for some.
It's good to have more than one member of a team reading the book at the same time. It helps motivation, saves time, and gives readers someone to talk to about what they are learning. If an audit team contains, for example, three people whose auditing covers risk registers or risk models then all three should have a copy so they can read at the same time and start talking to each other using the concepts they need to master. If they pass one copy around they may not build momentum or confidence.
So, don't just buy a copy, work out how many copies is the best number and order a box load. The content is dynamite and the cover is beautiful! Buying in bulk may gain discounts, and that also applies to buying multiple copies of the ebook.
Before the book was published someone much more famous than me kindly took a look at my book and provided this review:
“I was really excited by this book – and I am not a mathematician. With my basic understanding of business statistics and business risk management I was able to follow the arguments easily and pick up the jargon of a discipline akin to my own but not my own.”
Dr Sarah Blackburn, President at the Institute of Internal Auditors - UK and Ireland
In the UK try Amazon.
In the USA try Amazon.
Anywhere else, check Wiley's page on where to buy.