A chief audit executive (CAE) has been asked by the board to evaluate the effectiveness of ethical programs created by management. Which of the following would be the most appropriate action for the…

Question

Options

• ACompare the design of the organization's ethical programs with best practices.
• BVerify that a code of conduct and related policies exist and are communicated.
• CUse employee surveys to assess whether ethical programs are achieving desired outcomes.
• DCompare the cost of the ethical programs with the achieved outcomes.

• A
  8% (2)
• B
  72% (18)
• C
  4% (1)
• D
  16% (4)

Explanation

Verifying that a code of conduct and related policies exist and are communicated (B) is the most appropriate first step because it establishes the foundational audit evidence - you cannot evaluate a program's effectiveness without first confirming the program's basic components are in place and reaching employees. This aligns with IIA standards, which direct the CAE to assess whether management has designed and implemented the core elements of an ethical framework.

Why the distractors fall short:

• (A) Benchmarking against best practices evaluates design quality, not effectiveness - it tells you how the program looks on paper, not whether it works.
• (C) Employee surveys measure behavioral outcomes, which is a management-level activity; the CAE's role is to assess the program's design and implementation, not to perform management's own effectiveness measurement.
• (D) Cost-vs-outcome comparison is an efficiency analysis, not an effectiveness audit - it tells you if the program is cheap or expensive, not whether it's achieving ethical objectives.

Memory tip: Remember the sequence Exist → Communicate → Effect. An auditor must first confirm the program exists and is communicated before any effectiveness conclusion is possible - just as you can't grade a student who never received the syllabus.

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