In addition to her internal audit activity responsibilities, the chief audit executive has been asked to oversee the organization's insurance function. Which of the following responses is most appropriate?
A.
Welcome the additional responsibility, as it represents an opportunity to gain more information for future audits.
B.
Revise the internal audit charter to include oversight of the insurance function, ensuring that all of her responsibilities are properly documented.
C.
Report the request to the board and recommend alternate processes to obtain assurance related to insurance activities.
D.
Promptly remove the organization's insurance function from the audit universe.
The most appropriate response for a chief audit executive (CAE) who has been asked to oversee the organization's insurance function is to report the request to the board and recommend alternate processes to obtain assurance related to insurance activities. Taking on operational responsibilities such as overseeing the insurance function could impair the objectivity and independence of the internal audit activity, making it difficult to audit those activities impartially in the future.
IIA Standards on independence and objectivity, particularly Standard 1130: Impairment to Independence or Objectivity.
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