An Internal Audit Activity Has Made a Preliminary Determination That

question 141

Multiple Choice

An internal audit activity has made a preliminary determination that a division of the organization has employed improper accounting practices. Upon being informed, the head of the organization instructs the chief audit executive (CAE) to cease the investigation and to withhold the information from external auditors. Which course of action should the CAE follow?

• A) Report the communication to the organization's general counsel.
• B) Report the instruction to the chairperson of the audit committee.
• C) Inform the head of the organization that the investigation will continue as planned.
• D) Inform the external auditors of the findings and the mandate to stop investigating.

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Definitions:

Defense Mechanism

Psychological strategies used unconsciously by individuals to protect themselves from anxiety and to cope with reality.

Tantrums

Emotional outbursts, typically seen in children, characterized by crying, screaming, or aggressive behavior.

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