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Question 212

The chief audit executive (CAE) of a large retail operation believes that senior management has accepted a level of risk that exceeds the organization's current risk tolerance with respect to a major expansion. The CAE plans to meet with senior management to discuss these concerns. According to IIA guidance, which of the following would be an appropriate course of action in preparation for this meeting?

Understand management's basis for the decision.

Advise the board of the concern and upcoming meeting.

Ascertain which members of management have accepted the risk.

Determine if management has the authority to accept the risk.

    Correct Answer: B

    When preparing for a meeting with senior management to discuss concerns about risk levels exceeding the organization's tolerance, the chief audit executive should first understand management's basis for their decision, as this will provide insight into their reasoning and allow for a more informed discussion. Additionally, determining if management has the authority to accept the risk is crucial to ensure that their decision-making aligns with organizational policies and governance structures.

Discussion
balqis32Option: B

"Advise the Board" seems wrong

KonradK

First of all, CAE discuss the disagreement with the SM if not reached then it is followed up with the Board

Vietnguyenhoang01Option: A

What????? Why not A?

chachae

The question is CAE's course of action as preparation for the meeting w/ senior management first, and not necessarily about the action for the senior management accepting the risk.