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How should an internal auditor approach preparing a detailed risk assessment during engagement planning?
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Question 332 - IIA-CIA-Part2 discussion

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An organization is experiencing a significant risk that threatens its financial well-being Senior management requested that the chief audit executive (CAE) meet with them to discuss the risk. Which of the following would best describe the CAE's responsibility at the meeting?

A.
Inform senior management of the appropriate actions they should take to control the risk
Answers
A.
Inform senior management of the appropriate actions they should take to control the risk
B.
Recommend that the internal audit activity provide consulting services to help minimize the risk
Answers
B.
Recommend that the internal audit activity provide consulting services to help minimize the risk
C.
Assume the responsibility of resolving the significant risk that will affect the organization
Answers
C.
Assume the responsibility of resolving the significant risk that will affect the organization
D.
Determine whether senior management accepted risk that may be deemed unacceptable for the organization
Answers
D.
Determine whether senior management accepted risk that may be deemed unacceptable for the organization
Suggested answer: D

Explanation:

The chief audit executive (CAE) has the responsibility to provide assurance and insight on risk management processes. In a meeting with senior management to discuss significant risks, the CAE should focus on evaluating whether the risks accepted by senior management align with the organization's risk appetite and are within acceptable levels. The CAE should ensure that the risk management practices are adequate and that senior management is aware of any risks that might exceed the organization's tolerance levels. This approach is aligned with the role of internal audit in providing independent and objective evaluations.

Institute of Internal Auditors (IIA) Standards: Performance Standards 2120: Risk Management

IIA Practice Guide: Assessing the Risk Management Process

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asked 18/09/2024
Miles Greenyer
38 questions
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