The internal audit activity plans to assess the effectiveness of management’s self-assessment activities regarding the risk management process. Which of the following procedures would be most appropriate to accomplish this objective?
A.
Review corporate policies and board minutes for examples of risk discussions.
B.
Conduct interviews with line and senior management on current practices.
C.
Research and review relevant industry information concerning key risks.
D.
Observe and test control and monitoring procedures and related reporting.
To assess the effectiveness of management’s self-assessment activities regarding the risk management process, internal auditors should directly observe and test the control and monitoring procedures.
This hands-on approach allows auditors to verify the implementation and functionality of risk management controls and the accuracy of related reporting.
Direct observation and testing provide the most reliable evidence of the effectiveness of these procedures
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