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Exam IIA-CIA-Part2 topic 5 question 303 discussion

Actual exam question from IIA's IIA-CIA-Part2
Question #: 303
Topic #: 5
[All IIA-CIA-Part2 Questions]

Which of the following would most likely prompt special notification from the chief audit executive to senior management?

  • A. Operational management has decided to weigh an audit issue against the organization's risk tolerance.
  • B. A control's inaccurate operation has materially impacted the accuracy of the prior year's financial statements.
  • C. Occurrences of asset misappropriation have been identified as a result of an ineffective operational control design.
  • D. The controls that management performed to confirm compliance with health and safety standards were not systematically documented.
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Suggested Answer: A 🗳️

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Elvoo
2 months ago
Selected Answer: C
Option C involves the identification of asset misappropriation, a form of fraud, due to ineffective controls. Such findings are significant and require immediate attention from senior management to address the underlying control weaknesses and prevent further fraudulent activities. According to the Institute of Internal Auditors (IIA), the chief audit executive (CAE) must report significant risk and control issues, including fraud risks, to senior management and the board.
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emtofid
4 months ago
Selected Answer: B
Inaccuracy of the previous year financial statement could have a significant impact. i think answer should be B
upvoted 2 times
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