Insufficient Resources for High-Risk Audit Processes

C.

When an audit management team determines that there are insufficient resources to execute the annual audit plan, the next step should be to review the plan and prioritize audits based on risk. This may involve deferring some audits to the subsequent year or reducing the scope of the audits.

Option A, to remove audits from the annual plan to better match the number of resources available, is not a good option as it could leave important high-risk processes unaudited. The annual audit plan should be designed to ensure that high-risk processes are audited every year to identify and mitigate risks that could impact the organization.

Option B, to reduce the scope of the audits to better match the number of resources available, is a viable option, but it is important to ensure that the reduced scope still provides sufficient coverage of the high-risk processes. The scope of the audit should not be reduced to the point where it no longer provides value to the organization.

Option C, to present the annual plan to the audit committee and ask for more resources, is also a viable option. However, it may not be feasible to obtain additional resources within the timeframe needed to execute the audits. In addition, the audit committee may have other priorities that compete for the same resources.

Option D, to review the audit plan and defer some audits to the subsequent year, is a viable option that allows the organization to prioritize audits based on risk and ensure that high-risk processes are audited every year. Deferring some audits to the subsequent year may also provide more time to obtain additional resources or adjust the scope of the audits to ensure that they are adequately covered.

In summary, when there are insufficient resources to execute the annual audit plan, the audit management team should review the plan and prioritize audits based on risk. Deferring some audits to the subsequent year and/or reducing the scope of the audits may be viable options. Asking for more resources from the audit committee is also an option, but it may not be feasible or practical.