IIA-CIA-PART2 · Question #437
An internal auditor discovered that equipment used to monitor air quality was not maintained according to the established maintenance schedule. If the issue is not addressed, the equipment may not…
The correct answer is B. Communicate to the board the current situation, including the risk exposure to the organization. In this situation, the internal auditor has identified a significant risk related to the failure to maintain air quality monitoring equipment. Since the CEO and the manager have acknowledged the risk but decided not to take corrective action due to cost concerns, the chief…
Question
An internal auditor discovered that equipment used to monitor air quality was not maintained according to the established maintenance schedule. If the issue is not addressed, the equipment may not provide accurate information on pollutant levels, which could result in regulatory sanctions and reputational damage. The auditor discussed the issue with both the manager in charge and the CEO, who explained that they understand the risk, but it has become too expensive to maintain the equipment as scheduled. In this situation, what should the chief audit executive do?
Options
- AAdd value to the organization by taking initiative and implementing corrective actions to mitigate
- BCommunicate to the board the current situation, including the risk exposure to the organization.
- CDiscuss the matter with external auditors and request that they persuade management to address
- DContact the regulatory agency and inform them of the risk exposure.
How the community answered
(69 responses)- A23% (16)
- B61% (42)
- C6% (4)
- D10% (7)
Explanation
In this situation, the internal auditor has identified a significant risk related to the failure to maintain air quality monitoring equipment. Since the CEO and the manager have acknowledged the risk but decided not to take corrective action due to cost concerns, the chief audit executive (CAE) should escalate the issue to the board. This step is necessary to ensure that the board is fully informed of the potential regulatory and reputational risks.
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