Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 241

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

Answer options

• 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.

Correct answer: B

Explanation

Option B is correct because a material impact on financial statements is a significant concern that requires immediate attention from senior management. The other options, while serious, do not have the same level of direct financial implication or urgency that would necessitate special notification.