Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 180

According to the International Professional Practices Framework, the internal audit activity's decision to defer follow-up of recommendations and management's corrective actions until the next scheduled engagement for the area is justified when:

Answer options

• A. The reported findings or recommendations are significant enough to require immediate action by management.
• B. The action taken by management to address the recommendation is sufficient when weighed against the importance of the finding.
• C. Management has adequately understood and appropriately accepted the risk of not taking action to implement the recommendation.
• D. The significance of the finding or recommendation will allow auditors to perform monitoring by receiving periodic updates from management on corrective

Correct answer: B

Explanation

The correct answer is B because it indicates that management's actions are deemed satisfactory in relation to the severity of the finding. Options A and C suggest immediate action is necessary or that risk acceptance justifies inaction, which does not support deferring follow-up. Option D implies monitoring through updates, which does not align with the decision to defer follow-up.