A chief audit executive (CAE) following up on action plans from previously completed audits identifies that management has determined that certain…

Introduction:

The chief audit executive (CAE) must ensure that audit recommendations are appropriately

addressed and that any disagreements with management’s decisions are resolved effectively.

Escalation Process:

If the CAE disagrees with management’s decision to not implement certain action plans, it is

important to escalate the issue to the board to ensure that risks are properly managed and that there

is accountability.

Options Analysis:

Option A: Discussing with senior management is a preliminary step but may not resolve the issue if

there is still disagreement.

Option B: Discussing with key shareholders is not typically within the CAE’s direct line of reporting

and may not be appropriate.

Option C: Legal counsel can provide advice, but the final decision on audit matters typically rests with

the board.

Option D: The most appropriate step is for the CAE to discuss the matter with the board, as they have

the ultimate oversight responsibility and can ensure that management’s decisions align with the

organization’s risk management and governance frameworks.

Conclusion:

The CAE should discuss the matter with the board to ensure that management’s decision is aligned

with the organization’s risk management strategy and to address any unresolved issues.

Reference:

Internal Audit Standards and Practice Guides .