MANAGEMENT

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BUISENESS MANAGEMENT

RISK MANAGEMENT

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
An internal audit engagement was included in the approved internal audit plan. This is considered a moderately high-risk audit based on the internal audit function’s risk model. It is currently on a two-year audit cycle. Which of the following will likely have the greatest impact on the scope and approach of the internal audit engagement?
A
The area being audited involves the processing of a high volume of transactions.
B
Certain components of the process are outsourced.
C
A new system was implemented during the year, which changed how the transactions are processed.
D
The total dollars processed in this area are material.
Explanation: 

Detailed explanation-1: -The risk assessment should invariably be undertaken on a yearly basis. The assessment should also be periodically updated to take into account changes in business environment, activities and work processes, etc. 9.

Detailed explanation-2: -Senior management should inform the board of decisions about all significant issues raised by internal auditing. 5. When the CAE believes that senior management has accepted a level of risk that the organization considers unacceptable, the CAE must discuss the matter with senior management as stated in Standard 2600.

Detailed explanation-3: -The following are roles that internal audit should not undertake setting the risk appetite, imposing risk management processes, taking decisions on risk response, implementing risk responses on management’s behalf and accountability for risk management. These roles majorly lie on the operational management.

There is 1 question to complete.
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