CIA IIA-CIA-Part2 Book

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.

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.

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.

Detailed Explanation:Why Not Other Options?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.

Comprehensive and Detailed Explanation:

Per IIA Standard 1210 – Proficiency, engagements must be performed by auditors with the necessary skills. If resources are not available, the engagement supervisor cannot unilaterally suspend or reassign staff without CAE input. The appropriate action is to escalate the issue to the CAE (D), who has authority to adjust the audit plan, bring in external expertise, or reallocate resources. Option A may not be feasible due to scheduling conflicts. Options B and C prematurely halt the engagement, which undermines assurance delivery. The CAE is responsible for ensuring resource adequacy (per Standard 2030 – Resource Management). Therefore, the engagement supervisor must seek guidance from the CAE.

When an internal auditor receives a document displaying all the steps of a process and the path taken as transactions flow between each step, the auditor is most likely to use this document to perform an assessment of the adequacy of process controls. This flowchart or process map helps the auditor understand the process, identify key control points, and evaluate whether the existing controls are sufficient to mitigate risks within the process.

IIA Standards: 2201 - Planning the Engagement

IIA Practice Guide: Internal Auditing and Fraud

The most reliable source of testimonial evidence regarding whether a process is effectively performed according to its design would be the supervisor in charge of the process. This is because supervisors are typically responsible for overseeing the day-to-day operations and ensuring that processes are followed correctly. They have a comprehensive understanding of the process and can provide valuable insights into its effectiveness and adherence to design. The reliability of evidence increases with the proximity of the individual to the process in question and their role in ensuring compliance and performance.

IIA ' s Global Technology Audit Guide (GTAG) – Testimonial Evidence.