As a result of server managements assumption of risk there is residual risk that exceeds me organisation's risk appetite. Which of the following actions would be most appropriate for the chief audit…

The correct answer is D. Communicate with the board the issue of residual risk. The CAE has a responsibility to communicate significant risks to the board, particularly when the residual risk exceeds the organization's risk appetite. By communicating with the board, the CAE ensures that the highest level of governance is aware of the risk and can make…

Managing the Internal Audit Activity

Question

As a result of server managements assumption of risk there is residual risk that exceeds me organisation's risk appetite. Which of the following actions would be most appropriate for the chief audit executive to take?

Options

Aignore the responsibility of addressing the residual risk
BAssume the responsibility of addressing the residual risk
CEnsure senior management acknowledges residual risk
DCommunicate with the board the issue of residual risk

How the community answered

(49 responses)

A
6% (3)
B
20% (10)
C
12% (6)
D
61% (30)

Explanation

The CAE has a responsibility to communicate significant risks to the board, particularly when the residual risk exceeds the organization's risk appetite. By communicating with the board, the CAE ensures that the highest level of governance is aware of the risk and can make informed decisions about how to address it. Ignoring the risk, assuming responsibility without authority, or only ensuring senior management's acknowledgment without further action would be insufficient and not in line with the CAE's duties.

Topics

#residual risk#risk appetite#board communication#CAE escalation

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