The Chief Audit Executive (CAE) Notes During Review of the Final

question 255

Multiple Choice

The chief audit executive (CAE) notes during review of the final report of an assurance engagement that management has decided to accept the risks of two significant exposures identified by the audit. Which of the following actions by the CAE would be least prudent in these circumstances?

• A) Implement follow-up procedures to monitor the potential impact of those risks.
• B) Review the working papers and conclusions as to the perceived residual risk.
• C) Meet with senior management to consider their reasoning for the decision.
• D) Meet with the auditor-in-charge to review the conclusions.

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Definitions:

Imaginary Audience

The other people who, in an adolescent’s egocentric belief, are watching and taking note of his or her appearance, ideas, and behavior. This belief makes many teenagers very self-conscious.

Prefrontal Cortex

The part of the brain located at the front of the frontal lobe, associated with complex cognitive behavior, personality expression, decision making, and moderating social behavior.

Limbic System

A complex system of nerves and networks in the brain, involved with instinct and mood control; it also plays a key role in emotions and memories.

Basal Ganglia

Groups of nuclei in the brain involved in coordinating movement as well as learning and behaviors that are associated with a reward.