IIA Exam IIA-CIA-Part2 Topic 7 Question 86 Discussion

Actual exam question for IIA's IIA-CIA-Part2 exam

Question #: 86
Topic #: 7

An examination of the accounts payable function evidenced multiple findings with respect to segregation of duties. After management's response and action plan are received and documented in the final report, which of the following is most appropriate?

AFollow up after the applicable changes have been incorporated to validate management's response.

BInclude the items in the scope of the next scheduled audit of the accounts payable function.

CBecause management agreed with the findings, no further action is deemed necessary.

DHave an internal audit staff member placed into the accounting department until corrections are made.
After management responds to audit findings and provides an action plan, it is crucial for the internal audit activity to follow up to validate that the promised changes have been implemented and are effective. This follow-up ensures that the issues identified, such as those related to segregation of duties in accounts payable, have been appropriately addressed.
Detailed Explanation:
IIA Standard 2500 -- Monitoring Progress:
This standard requires the internal audit activity to monitor the implementation of management's corrective actions. Following up on audit findings is essential to ensure that the actions taken effectively mitigate the identified risks.
Validation of Corrective Actions:
By conducting a follow-up review, the internal audit activity can verify that the changes have been made as planned and assess whether these changes are sufficient to resolve the issues. This process helps maintain the integrity and effectiveness of the internal audit function.
IIA Practice Advisory 2500-1:
The advisory emphasizes the importance of follow-up activities to confirm that management's responses to audit recommendations have been implemented as intended.
Why Not Other Options?
Option B (Include in the next scheduled audit): While this is a backup plan, it may delay the validation of corrective actions, allowing potential risks to persist.
Option C (No further action): This approach is inappropriate because it assumes the problem is resolved without verification, which could lead to unmitigated risks.
Option D (Placing an auditor in the department): This could compromise the independence of the internal audit function and is not a standard practice.
Conclusion: Option A is correct because it ensures that the internal audit activity fulfills its responsibility to validate that management's corrective actions have been implemented and are effective, aligning with IIA standards on monitoring progress.

Show Suggested Answer

Suggested Answer: A

by Rose at Sep 08, 2024, 10:01 PM

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Maybelle

1 months ago

Option D, though? Placing an auditor in the accounting department? That's like trying to put out a grease fire with gasoline. Talk about a recipe for disaster.

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2 months ago

Hmm, looks like the audit team really needs to follow up and make sure the changes are actually implemented. Can't just take management's word for it, got to verify the fixes are working.

upvoted 0 times