An Internal Audit Activity Encounters a Scope Limitation from Senior

question 212

Multiple Choice

An internal audit activity encounters a scope limitation from senior management that will affect its ability to meet its goals and objectives for a potential engagement client. The nature of the scope limitation should be.

• A) Noted in the audit workpapers, but the engagement should be carried out as scheduled, with any necessary adjustments made based on the scope limitation.
• B) Communicated to the external auditors so that they can investigate the area in more detail.
• C) Communicated, preferably in writing, to the board.
• D) Communicated to management, stating that the limitation will not be accepted because it would impair the audit activity's independence.

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Definitions:

Autonomous Judgment

The ability to make decisions independently, based on one’s own reasoning and values.

Dualistic Thinking

A cognitive tendency to see situations and issues in black and white, categorizing concepts as either/or without acknowledging complexities.

Relativistic

Pertaining to the concept that points of view have no absolute truth or validity, having only relative, subjective value according to differences in perception and consideration.

Pragmatic Thought

A mode of thinking concerned with practical matters and the application of ideas and theories to solve problems or achieve goals.