Engagement Results and Monitoring

Communicating engagement results and following up: report attributes and content, recommendations and action plans, closing communication, residual risk, risk acceptance, monitoring and escalation.

5 minutes 5 Questions

In the CIA Challenge Exam, Engagement Results and Monitoring covers how internal auditors communicate findings and make sure management acts on them. Under the IIA's Global Internal Auditing Standards (Principles 14 and 15, formerly the 2400 and 2500 series), engagement communications must include …

Concepts covered
Closing Communication and Final ReportingCommunicating Engagement ResultsRecommendations, Action Plans and Agreed ActionsMonitoring Management Action PlansCommunicating Risk AcceptanceAssessing Residual Risk for the EngagementEscalating Unimplemented Action PlansAttributes of Effective Results Communication
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CIA Challenge - Engagement Results and Monitoring Example Questions

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Question 1

A chief audit executive learns that audit committee members are confused when reading final engagement communications. Some engagement teams label findings as "major," others use "high," and others use "critical." These labels are applied with different meanings from one report to the next. Members cannot tell which issues deserve the most attention. Which communication practice would best resolve this problem?

Correct Answer: Adopt standard rating definitions that every engagement team applies uniformly

Adopting standard rating definitions that all engagement teams apply uniformly creates consistent, comparable communications. Audit committee members can then reliably tell which findings are most significant across all reports.
Letting each team define its own terms keeps the very inconsistency that causes the confusion. Removing severity ratings and listing findings in order of discovery strips away the prioritization members need. Having the board choose terms for each new engagement still produces shifting labels from report to report and wrongly shifts a methodology responsibility away from the chief audit executive.
Key concept: consistent, clear engagement communication through a standardized finding-rating methodology established by the chief audit executive.

Question 2

Fieldwork and the closing communication for an engagement are finished, and the results include significant control weaknesses that management must address. The engagement team proposes holding the final engagement communication for three months so it can be released with the internal audit function's annual reporting cycle. Which action by the chief audit executive best applies the attribute of timeliness?

Correct Answer: Issue the final communication soon enough for management to act on the significant findings

Timeliness means engagement results are communicated promptly enough for management to take appropriate corrective action, so the chief audit executive should issue the final communication without waiting for the annual cycle, since significant control weaknesses need attention now.
Routing the draft through the audit committee and waiting for its next meeting adds an unnecessary delay. Holding results for the annual cycle puts reporting convenience ahead of the usefulness of the information. Delaying issuance to document every minor exception confuses completeness with excessive detail and lets immaterial items hold up urgent findings.
Key concept: timeliness as a quality of engagement communications, meaning results are delivered when they can still be acted on.

Question 3

Which of the following best describes a constructive final engagement communication?

Correct Answer: One that is helpful to the client and the organization and leads to needed improvements

Under IIA guidance, constructive communications help the engagement client and the organization and lead to improvements where needed, which makes this answer correct.
The other choices describe different quality attributes. Fair, impartial, and based on a balanced assessment describes objective communications. Logical, easily understood, and free of unnecessary technical language describes clear communications. Containing all significant and relevant information needed to support conclusions describes complete communications.
Key concept: the IIA quality attributes of engagement communications are accurate, objective, clear, concise, constructive, complete, and timely. Each has a distinct definition, and constructive specifically focuses on usefulness and driving improvement.

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