After completing an assurance engagement, the chief audit executive (CAE) concludes that management has accepted a level of risk that may be unacceptable to the organization. What is the most…

The correct answer is A. Discuss the issue with senior management. The IIA Standards require the CAE to communicate risk acceptance that may be unacceptable to senior management and the board. The first step is to discuss the issue with senior management to understand their perspective and potentially resolve the concern. If senior management…

Managing the Internal Audit Function

Question

After completing an assurance engagement, the chief audit executive (CAE) concludes that management has accepted a level of risk that may be unacceptable to the organization. What is the most appropriate first step for the CAE to take?

Options

ADiscuss the issue with senior management.
BDiscuss the issue only with the CEO.
CInform the board.
DDiscuss the issue with the members of management responsible for the risk area.

How the community answered

(52 responses)

A
79% (41)
B
8% (4)
C
12% (6)
D
2% (1)

Explanation

The IIA Standards require the CAE to communicate risk acceptance that may be unacceptable to senior management and the board. The first step is to discuss the issue with senior management to understand their perspective and potentially resolve the concern. If senior management does not take appropriate action, the CAE must then inform the board to ensure they are aware of the risk and can take necessary action.

Topics

#risk acceptance#CAE escalation#senior management#board communication

Community Discussion

No community discussion yet for this question.

Full IIA-CIA-PART2 Practice