Financial and Non-Financial Risks of Pharmaceutical Industry: Identification and Continuous Monitoring Capability in Internal Audit

As part of its consulting activities, internal audit provides management with advice on risk identification, assessment, and monitoring. Risk identification and continuous monitoring (CM) are vital aspects of risk management, being less studied in Iran. This study identifies five dimensions of risk (financial, strategic, operating, reporting, legal & compliance) including 25 risk components, through a comprehensive approach. Then, it assesses the significance and the CM capability of them. For this purpose, the opinions of 22 financial and non-financial experts in the pharmaceutical industry, including C-suits, board members, and Ministry of Health officials are applied using the Fuzzy Delphi method. The results indicate that among identified risks, 15 risks including funding & cash flow, product portfolio, legal changes, sales, procurement, macroeconomic, technology shift, production, governance, competitors, credit, human resources, reputation, resource allocation & budget, and inventory management are significant; 9 risks including inventory management, funding & cash flow, sales, product portfolio, credit, resource allocation & budgeting, purchase, asset protection, and production can be continuously monitored; and 8 risks including funding & cash flow, product portfolio, sales, procurement, production, credit, resource allocation & budgeting, and inventory management are significant and can be continuously monitored.