Learn the IIA-recommended approach chief audit executives should take when making significant changes to the internal audit plan and presenting updates to the board.
Table of Contents
Question
The chief audit executive (CAE) has made a significant change to the internal audit plan and is preparing to present a formal update to the board. According to IIA guidance, which of the following represents the most appropriate approach for the CAE to take?
A. Inform the board of the change before the presentation, and conduct a discussion session at the time of the presentation to answer questions.
B. Inform senior management of the change and seek their approval before the presentation, then seek approval from the board at the time of the presentation.
C. Inform senior management and the board of the change via the presentation, then solicit discussion, and finally seek the approval of only the board.
D. Inform senior management and the board of the change via the presentation; to approvals are necessary.
Answer
According to IIA guidance, the most appropriate approach for the chief audit executive (CAE) to take when making a significant change to the internal audit plan and preparing to present a formal update to the board is:
A. Inform the board of the change before the presentation, and conduct a discussion session at the time of the presentation to answer questions.
Explanation
The CAE should proactively communicate the change to the internal audit plan to the board prior to the formal presentation. This gives the board advance notice and time to review the change. Then, during the presentation itself, the CAE should allocate time for an interactive discussion session to address any questions or concerns the board may have about the change.
This approach keeps the board well-informed, provides transparency around significant changes impacting the internal audit function, and allows for constructive dialogue between the CAE and the board. It positions the CAE as taking a proactive, consultative approach with the board.
The other answer choices are less appropriate:
- B and C suggest informing senior management first, but the board should be the primary governing body the CAE informs about audit plan changes.
- C and D present the change at the presentation without advance notice, which does not give the board sufficient time to review it ahead of the discussion.
- D states no approvals are needed, but the board should approve significant changes to the audit plan.
Therefore, proactively informing the board before the presentation and holding a discussion during the presentation to address questions is the most suitable approach for the CAE to take in this scenario, per IIA guidance.
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