Greatest Risk of Delay in Internal Audit Control Review for Payroll System Project
Question
An enterprise's internal audit group has scheduled a control review of a payroll system project but has been told to wait until the system is implemented.
Which of the following is the GREATEST risk associated with the delay?
Answers
Explanations
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A. B. C. D.A.
The greatest risk associated with the delay in conducting a control review of a payroll system project by the enterprise's internal audit group after implementation is option A: Increased cost to mitigate deficiencies.
Explanation:
The internal audit group is responsible for providing independent assurance and advice to the organization on the adequacy and effectiveness of its governance, risk management, and control processes. Conducting control reviews of projects helps the internal audit group to ensure that the project is following the appropriate governance, risk management, and control processes.
Delaying the control review until after the implementation of the payroll system project can lead to various risks, including:
A. Increased cost to mitigate deficiencies: If the internal audit group finds control deficiencies in the payroll system after it has been implemented, the cost of mitigating these deficiencies will likely increase. This is because fixing control deficiencies after the system has been implemented is often more expensive than addressing them during the project's development phase.
B. A delay in the development of new key performance indicators (KPIs): Key performance indicators (KPIs) are used to monitor and measure the performance of projects. Delaying the control review until after the implementation of the payroll system project may result in a delay in the development of new KPIs, making it difficult to assess the project's performance.
C. Continued dependency on compliant legacy systems: If the payroll system project is replacing a legacy system, delaying the control review until after implementation may result in continued dependence on the legacy system, which may have compliance issues.
D. Lack of adherence to industry best practices: Delaying the control review until after implementation may result in the project not following industry best practices, which may affect its effectiveness and efficiency.
In summary, delaying the control review until after implementation can lead to increased costs to mitigate deficiencies, delay in the development of new KPIs, continued dependence on compliant legacy systems, and lack of adherence to industry best practices. Therefore, option A is the greatest risk associated with the delay.
