Which of the following actions should the internal audit activity take during an audit engagement when examining the effectiveness of risk management processes?

Which of the following actions should the internal audit activity take during an audit engagement when examining the effectiveness of risk management processes?
A . Evaluate how the organization manages fraud risk.
B . Establish procedures for improving risk management processes.
C . Ensure risk responses are aligned with industry standards.
D . Verify that organizational objectives are aligned with each department’s objectives.

View Answer

Answer: A

Explanation:

During an audit engagement that examines the effectiveness of risk management processes, the internal audit activity should evaluate how the organization manages fraud risk. This approach ensures that the organization’s risk management practices are comprehensive and effectively address all significant areas of risk, including the potential for fraud.

Reference: The Institute of Internal Auditors (IIA) – International Standards for the Professional Practice of Internal Auditing, especially those related to risk management.