The Chief Audit Executive (CAE) of a Large Retail Operation

question 126

Multiple Choice

The chief audit executive (CAE) of a large retail operation believes that senior management has accepted a level of risk that exceeds the organization's current risk tolerance with respect to a major expansion. The CAE plans to meet with senior management to discuss these concerns. According to IIA guidance, which of the following would be an appropriate course of action in preparation for this meeting? • Understand management's basis for the decision. • Advise the board of the concern and upcoming meeting. • Ascertain which members of management have accepted the risk. • Determine if management has the authority to accept the risk.

• A) 1 and 2 only
• B) 1 and 4 only
• C) 2 and 3 only
• D) 3 and 4 only

---

Definitions:

Manager

An individual responsible for planning, organizing, leading, and controlling resources to achieve specific organizational goals.

Strike

The direction of a horizontal line on an inclined surface.

Dip

The angle that a layer or structural surface makes with the horizontal, measured perpendicular to the strike.

Fault

A crack in the Earth's crust resulting from the movement of rock on either side of the crack, which can lead to earthquakes.