Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 117

An audit observation noted that annual inventory counts of biofuel was not being performed appropriately. Fuel yards were not visited and physical amounts of biofuel were not reconciled with accounting data. Management of the division understood the issue and promised to resolve the problem. When should the internal auditor schedule a follow-up review?

Answer options

• A. As soon as possible; no later than two months after the audit.
• B. When convenient for both parties.
• C. When management has indicated that the issue has been resolved.
• D. Before financial year end.

Correct answer: C

Explanation

The correct answer is C because the internal auditor should wait until management has confirmed that the issue has been resolved to effectively assess the effectiveness of the corrective actions taken. Options A and D are premature since they do not account for management's resolution of the issue, while B lacks a definitive timeframe, making it less effective for follow-up purposes.