Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 103

Which of the following situations is most critical for the chief audit executive to report to the board?

Answer options

• A. The chief audit executive disagreed with the business unit manager's initial decision to accept a particular risk. Management ultimately agreed to address the risk only after discussing the issue with senior management.
• B. A staff internal auditor had difficulties completing a portion of the audit because management of the area under review was unwilling to cooperate and provide information timely.
• C. The internal audit activity was restructured, which resulted in a significant change in responsibilities among audit managers and supervisors for some audits.
• D. The resignation of an internal audit manager during the year caused the chief audit executive to defer a number of audit engagements to the following year.

Correct answer: B

Explanation

Option B is the most critical situation to report because a lack of cooperation from management can severely hinder the effectiveness of the audit process, impacting the overall risk assessment. Options A, C, and D, while noteworthy, do not directly affect the audit's execution as significantly as management's unwillingness to cooperate in Option B.