IIA-CIA-PART2 · Question #418
During a review of the organization's waste management processes, the internal auditor discovered that wastewater is being disposed of inappropriately. The auditor's recommendations, suggested to…
The correct answer is C. Convene a meeting with senior management and discuss the issue and the potential impact it may. When management decides not to implement a critical recommendation, especially one related to regulatory compliance and potential reputational risk, it is essential for the chief audit executive (CAE) to escalate the issue to senior management. This step ensures that management…
Question
During a review of the organization's waste management processes, the internal auditor discovered that wastewater is being disposed of inappropriately. The auditor's recommendations, suggested to mitigate the risk of regulatory sanctions and reputational damages, were accepted and timelines for implementation were agreed. However, during the internal audit activity's periodic follow-up exercise, management indicated that the recommendation was too expensive to implement and the current disposal method has been cost-effective. What should the chief audit executive do in this case?
Options
- ANothing, as the internal audit activity has fulfilled its responsibility of providing recommendations to
- BContact the regulatory agency responsible for monitoring such matters in order to convince
- CConvene a meeting with senior management and discuss the issue and the potential impact it may
- DHighlight the current exposure to the external auditors so they too can highlight the issue and
How the community answered
(26 responses)- A31% (8)
- B15% (4)
- C42% (11)
- D12% (3)
Explanation
When management decides not to implement a critical recommendation, especially one related to regulatory compliance and potential reputational risk, it is essential for the chief audit executive (CAE) to escalate the issue to senior management. This step ensures that management fully understands the risks involved and can make an informed decision.
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