An internal audit activity has made a preliminary determination that a division of the organization has employed improper accounting practices. Upon being informed, the head of the organization instructs the chief audit executive (CAE) to cease the investigation and to withhold the information from external auditors. Which course of action should the CAE follow?
A) Report the communication to the organization's general counsel.
B) Report the instruction to the chairperson of the audit committee.
C) Inform the head of the organization that the investigation will continue as planned.
D) Inform the external auditors of the findings and the mandate to stop investigating.

Question

Quizplus · Accepted Answer

The CAE should report the instruction to the chairperson of the audit committee, as this ensures that the audit committee is aware of potential interference with the audit process and can take appropriate action to address the situation.

An Internal Audit Activity Has Made a Preliminary Determination That