Senior leadership is concerned about a recent trend of excessive exceptions to existing controls.
Which of the following should be implemented to address this concern?
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A. B. C. D.A.
Excessive exceptions to existing controls can indicate that the controls themselves are not effective or that they are not being followed properly. Senior leadership's concern is warranted because the organization is at risk of not achieving its goals and objectives if it does not have reliable controls in place.
To address this concern, the organization needs to take steps to improve its control environment. The following are explanations for each of the options listed:
A. Continuous monitoring: This involves monitoring the organization's activities and controls on an ongoing basis to detect issues as they arise. By implementing continuous monitoring, the organization can identify control weaknesses and exceptions in real-time and take corrective actions promptly. This approach can help prevent issues from becoming more significant problems in the future.
B. Independent audits: This involves engaging an independent third party to perform an audit of the organization's controls. An audit can identify control deficiencies, assess the effectiveness of existing controls, and provide recommendations for improvement. Independent audits can provide an objective evaluation of the organization's control environment and help build trust with stakeholders.
C. A control library: This involves creating a repository of controls that the organization can use to ensure consistent implementation of controls across the organization. A control library can also serve as a resource for training and awareness activities.
D. Risk awareness training: This involves providing training to employees to increase their understanding of risks and the importance of controls. This training can help employees identify control weaknesses and report exceptions promptly. It can also increase awareness of the importance of following controls to achieve the organization's objectives.
In conclusion, while each option has its advantages, implementing continuous monitoring or independent audits is likely to be more effective in addressing the concern of excessive exceptions to existing controls. These options provide an objective evaluation of the control environment and can help identify control deficiencies that need to be addressed. The organization can use the information obtained from continuous monitoring or independent audits to improve the control environment and reduce the likelihood of future exceptions.