Because of an Abundance of High Priority Requests from Management

question 138

Multiple Choice

Because of an abundance of high priority requests from management, an internal audit activity no longer has the resources to meet all of its commitments contained in the annual audit plan. Which of the following would be the best course of action for the chief audit executive to follow?

• A) Continue with the plan and seek opportunities to adjust priorities and reallocate resources.
• B) Present a reassessment of the plan to the board and senior management for consideration.
• C) Reassess the plan and either cancel or divert resources away from the lowest priority activities.
• D) Advise the board immediately and seek their support for additional resources to meet the needs of the plan.

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Definitions:

Discretionary Policy

Economic policies based on ad hoc decisions by the government or monetary authorities to influence the economy, such as changes in spending or taxation.

Inflationary Expectations

The anticipation by consumers and businesses of future inflation, which can influence economic behavior such as spending, saving, and investment.

Potential GDP

The maximum output an economy can produce without triggering inflation, if all resources are fully employed.

Active Approach

A strategy in investment or management that involves ongoing, dynamic decision-making and actions in order to achieve specific objectives.