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CS Professional · Internal and Forensic Audit · Reporting under Internal Audit

During a quarterly review, the internal auditor of Kaveri Textiles Ltd. finds that two earlier recommendations on vendor payment controls remain unimplemented. Which action best reflects sound internal audit follow-up practice before the next Audit Committee meeting?

The internal auditor should report the status of each unimplemented recommendation to the Audit Committee, along with management's response and revised timelines. Follow-up exists to keep governance bodies informed about unresolved risks, while directly implementing controls would compromise the auditor's objectivity.

  1. ADrop the findings from the report because management has already seen them once
  2. BReport the status of each earlier recommendation, with management's response and revised timelines, to the Audit CommitteeCorrect
  3. CWait until the statutory auditor raises the same issue before reporting again
  4. DInstruct the accounts head to implement the controls directly and then close the findings

Explanation

Follow-up requires tracking each agreed recommendation and reporting its status to those charged with governance, including delays and management's response. Dropping or deferring findings defeats the purpose. Directly implementing controls would impair independence, as the internal auditor would then be performing a management function.

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