Which of the following is MOST important to consider when creating audit follow-up procedures?
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A. B. C. D.C.
When creating audit follow-up procedures, the MOST important consideration is whether the identified risks have been mitigated (Option C). Follow-up procedures help to determine if the organization has taken appropriate corrective actions to address the identified issues, and whether those actions have been effective in reducing the risks to an acceptable level. This is critical because if risks are not adequately mitigated, they could lead to future problems and potentially negative consequences for the organization.
While having sufficient funds to address the issue (Option A) is important, it is not the most critical factor. If the organization does not have the funds to address an issue, alternative mitigation strategies may need to be considered. However, the more important question is whether the organization has taken any actions at all to address the identified risks.
Whether management has determined if risk is within the organization's risk appetite (Option B) is also important, but not the most critical factor. It is important for management to determine whether the risks are within the organization's risk appetite to ensure that the organization is taking on risks that align with its strategic objectives. However, even if risks are within the organization's risk appetite, they still need to be appropriately mitigated to avoid negative consequences.
Finally, whether the auditee has allotted sufficient time for the follow-up (Option D) is also important, but not as critical as whether the risks have been mitigated. Adequate time should be allotted for follow-up procedures, but if the risks have not been mitigated, additional time may be needed to develop and implement effective corrective actions.