The Chief Audit Executive (CAE) of a Multinational Entity with Highly

question 280

Multiple Choice

The chief audit executive (CAE) of a multinational entity with highly automated and complex operations has just completed the update of the risk-based audit plan. Interviews with management revealed the introduction of new technology and a significant increase in both the number and severity of technology-based risk exposures. According to the International Professional Practices Framework, which of the following would be the best course of action for the CAE to undertake next?

• A) Develop a detailed audit plan that makes the most efficient use and reallocation of existing internal audit resources.
• B) Arrange for the outsourcing of some technology intensive audit processes and procedures based on the plan changes.
• C) Evaluate whether appropriate skills and knowledge required to perform the necessary audit work currently exist in the department.
• D) Begin planning to recruit information technology audit specialists and other expert personnel into the internal audit activity.

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Definitions:

Supply Curve

A graphical representation of the relationship between the price of a product and the quantity of the product that a supplier is willing and able to supply, holding all other factors constant.

Equilibrium Price

The price at which the quantity of a good or service demanded by consumers is equal to the quantity supplied by producers, leading to a stable market condition.

Surplus

A surplus occurs when the quantity of a good or service supplied exceeds the quantity demanded, often leading to a decrease in prices or an accumulation of unsold products.

Shortage

At a given price, the amount by which quantity demanded exceeds quantity supplied; a shortage usually forces the price up.