Question

When actions have not been taken by management on reported engagement observations, conclusions, and recommendations, the internal auditor should

• A.Develop and implement a plan of corrective action.

• B.Withhold communications about other related engagement observations, conclusions, and recommendations until corrective action is taken.

• C.Determine whether management or the board has assumed the risk for not taking corrective action.

• D.Conclude that the engagement observations, conclusions, and recommendations are insignificant and no corrective action is necessary.

Answer 1

Ans - Determine whether management or the board has assumed the risk for not taking corrective action (Option 'C')

When auditor has reported engagement observations, conclusions and recommendations, then his responsibility for follow up includes determining whether corrective actions have been taken and if so then whether desired results are being achieved or not. But if auditor finds that no corrective actions have been taken, then internal auditor can determine whether management or the board has assumed the risk for not taking corrective action

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