Question

Which of the following does the CAE need to consider when determining the

extent of follow-up required?

I. Significance of the reported observation.
II. Past experience with the manager charged with the corrective action.
III. Degree of effort and cost needed for the corrective action.
IV. The experience of the internal audit staff.

a. I and III.
b. I, II, and III.
c. II, III, and IV.
d. I, II, III, and IV.

Answer 1

The CAE needs to consider the significance of the reported observation, past experience with the manager, degree of effort and cost, and the experience of the internal audit staff when determining the extent of follow-up required.

Step-by-step explanation:

The CAE (Chief Audit Executive) needs to consider the following factors when determining the extent of follow-up required:

1. Significance of the reported observation: This involves assessing the importance and impact of the observation on the organization's operations, compliance, or financial performance.
2. Past experience with the manager charged with the corrective action: It is important to consider the manager's track record and effectiveness in implementing corrective action in the past.
3. Degree of effort and cost needed for the corrective action: Evaluating the level of effort and resources required helps determine appropriate follow-up actions.
4. The experience of the internal audit staff: The expertise and experience of the internal audit team can influence the required level of follow-up and the ability to effectively address the reported observation.

Therefore, the correct answer is option d. I, II, III, and IV.