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Question 77 - IIA-CIA-Part2 discussion

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An audit client responded to recommendations from a recent consulting engagement. The client indicated that several recommended process improvements would not be implemented. Which of the following actions should the internal audit activity take in response?

A.
Escalate the unresolved issues to the board, because they could pose significant risk exposures to the organization.
Answers
A.
Escalate the unresolved issues to the board, because they could pose significant risk exposures to the organization.
B.
Confirm the decision with management and document this decision in the audit file.
Answers
B.
Confirm the decision with management and document this decision in the audit file.
C.
Document the issue in the audit file and follow up until the issues are resolved.
Answers
C.
Document the issue in the audit file and follow up until the issues are resolved.
D.
Initiate an assurance engagement on the unresolved issues.
Answers
D.
Initiate an assurance engagement on the unresolved issues.
Suggested answer: B

Explanation:

When a client decides not to implement recommended process improvements from a consulting engagement, the internal audit activity should confirm the decision with management and document it in the audit file. This approach ensures that the audit trail is complete and that there is a record of management's acceptance of the associated risks. Escalating the issue to the board (Option A) or initiating an assurance engagement (Option D) might be necessary if the risks are significant, but these actions are not the immediate next steps. Continuous follow-up (Option C) is more relevant to assurance engagements rather than consulting engagements.

Reference:

IIA Standard 2500: Monitoring Progress.

IIA Practice Guide on Consulting Engagements.

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asked 18/09/2024
Paula Delgado
35 questions
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