According to IIA guidance which of the following statements is true regarding the annual audit plan?

Question

Options

• AThe annual audit plan should only be adjusted in response to problems with resourcing, scope,
• BThe chief audit executive (CAE) may incorporate risk information, including risk appetite levels
• CIn an immature risk management environment it is preferable for the CAE to rely solely on her
• DThe CAE may make adjustments to the annual audit plan as needed without senior management

• B
  89% (25)
• C
  4% (1)
• D
  7% (2)

Explanation

According to the Institute of Internal Auditors (IIA) guidance, the chief audit executive (CAE) should develop a risk-based audit plan that takes into account the organization's risk management framework, including its risk appetite levels. This aligns with Standard 2010 ?Planning, which states that the CAE must establish a risk-based plan to determine the priorities of the internal audit activity, consistent with the organization's goals. Risk appetite levels from management are a critical component of understanding the organization's risk profile and should be incorporated into the audit plan. Thus, the CAE may incorporate risk information, including risk appetite levels from management, at her discretion.

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