Question

Which of the following is the best reason for the CAE to consider the organization's strategic plan in developing the annual audit plan?

Select one:
a. To emphasize the importance of the internal audit function to the organization.
b. To ensure that the internal audit plan will be approved by senior management.
c. To make recommendations to improve the strategic plan.
d. To ensure that the internal audit plan supports the overall business objectives.

Answer 1

The CAE should align the annual audit plan with the organization's strategic plan to ensure that the audit activities focus on areas crucial for achieving strategic goals, effectively manage key risks, and optimize the use of resources.

Step-by-step explanation:

The best reason for the Chief Audit Executive (CAE) to consider the organization's strategic plan in developing the annual audit plan is d. To ensure that the internal audit plan supports the overall business objectives. The alignment of the audit plan with the strategic plan ensures that the internal audit function contributes value by focusing on areas that are critical to achieving strategic goals. The auditors can then prioritize their activities to assure key risks relating to strategic objectives are being managed effectively and that resources are directed to those areas where they will have the most impact.