Student Forums CIA Part 2: Practice of Internal Auditing Section III: Performing the Engagement 81. Question ID: CIA2 M2 Q027 (Topic: 3. Communicating and Reporting to Senior M

81. Question ID: CIA2 M2 Q027 (Topic: 3. Communicating and Reporting to Senior M

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  • #227740

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    This forum is restricted to members of the associated course(s).

    Mitalee Chowdhury
    Participant

    81. Question ID: CIA2 M2 Q027 (Topic: 3. Communicating and Reporting to Senior Management and the Board)

    At the end of the current fiscal year, a company’s chief audit executive (CAE) put together a packet of information for senior management and the audit committee. On an annual basis, the CAE submits this information packet that describes the internal audit activity’s plan and resource requirements for the coming year. The CAE’s information packet would include all of the following except:

    • Audit work plans for the engagements to be conducted.
    • Description of engagements to be conducted
    • The amount of money needed to maintain the internal audit activity for the coming year.
    • Staff requirements.

    Correct Answer Explanation for A:

    Based on Standard 2020, the CAE must communicate the IAA’s plan and resource requirements, including significant interim changes, to senior management and the board for review and approval. The CAE must also communicate the impact of resource limitations. These engagement plans and resource requirements must be submitted on an annual basis and must include a summary of the IAA’s work schedule, staffing plan, and financial budget. This information will help ascertain whether the IAA objectives and plans are in line with those of the organization and its board and are consistent with the internal audit charter

    What is the thin line difference between option A and B.? Why is option A the right answer and not B? I am actually confused coz if CAE includes either information, its not any harm.

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  • #227741

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    Brian Hock
    HOCK international

    Hello, Mitalee,

    Option A is incorrect because that is too much information. Senior management and the board is interested in what engagements will be conducted in the future (choice B), but they do not need to know the detailed work program of those engagements (choice A).

    Yes, it is correct, that there is no harm in including that, but it will not be included because it is unnecessary for senior management and the audit committee.

    Brian

    #227743

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    Mitalee Chowdhury
    Participant

    got it. Thanks:)

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