Which of the following situations would best support the decision of a chief audit executive (CAE) to defer follow-up activity at a branch office until the next audit engagement?
Which of the following situations would best support the decision of a chief audit executive (CAE) to defer follow-up activity at a branch office until the next audit engagement?
The decision to defer follow-up activity is best supported when the CAE and management agree that the corrective action taken to date is sufficient. This implies that the identified issues have been adequately addressed or mitigated, making immediate follow-up unnecessary. Therefore, deferring follow-up until the next scheduled audit engagement would be a reasonable and justified decision in this context.
Can someone explain why D is the answer and not C? Shouldn't there be a form of validation before CAE can conclude that corrective action taken is sufficient?
I also thought of C, bcos the question says defer a follow up engagement. If corrective action has been taken, a follow ip engagement should be carried out immediately. Am still thinking why D.
CAE can only agree with management after performing a validation of management's claim.
IPPF 2010 The chief audit executive must establish a risk-based plan to determine the priorities of the internal audit activity. C has nothing to do with risk. D CAE believes that the risk is reduced.
in simple concept, you can only defer if the audit issues are deemed closed/resolved/rectified.