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Question 61:
What is the PRIMARY purpose of an audit charter?
A) Define the authority and scope of audit activities
B) Document technical audit procedures
C) Record individual audit findings
D) Calculate audit costs and budgets
Answer: A
Explanation:
The primary purpose of an audit charter is to define the authority and scope of audit activities, establishing the audit function’s mandate, independence, and responsibilities within the organization. An audit charter is a formal document approved by senior management and the board or audit committee that authorizes the internal audit function to perform its duties and defines its organizational position. The charter establishes the audit function’s purpose and objectives, scope of audit activities including what areas can be audited, authority to access records, systems, and personnel necessary for audit work, independence and reporting relationships ensuring objectivity, responsibilities and accountability of the audit function, and basis for evaluating audit performance. A strong audit charter explicitly grants auditors unrestricted access to all organizational records, systems, facilities, and personnel relevant to audit assignments, ensuring they can perform thorough evaluations without interference. The charter should establish that the audit function reports to senior management and the board or audit committee, not to operational management, maintaining independence from audited areas. Independence is critical for objective audit opinions unclouded by business pressures or conflicts of interest. The charter may also address audit standards to be followed such as ISACA standards or IIA standards, confidentiality requirements for audit information, and coordination with external auditors. The charter provides authority for auditors to perform their work and protects them from retaliation or interference when reporting findings. Without an adequate charter, audit effectiveness may be compromised by limitations on access or pressure from management to soften findings. The charter should be reviewed periodically to ensure it remains appropriate as the organization evolves. Understanding the audit charter is fundamental for IS auditors because it defines their role and establishes the foundation for conducting audits with appropriate authority and independence.
B is incorrect because documenting technical audit procedures is addressed in audit programs and working papers, not the audit charter. The charter is a high-level authorization document, not detailed procedure documentation. Audit procedures are developed for specific audit engagements based on objectives and risks.
C is incorrect because recording individual audit findings occurs during audit fieldwork and is documented in working papers and audit reports, not the audit charter. The charter establishes authority to conduct audits that may identify findings, but does not itself record audit findings from specific engagements.
D is incorrect because calculating audit costs and budgets is an administrative function related to resource planning, not the primary purpose of an audit charter. While the charter may reference resource requirements, its main purpose is establishing authority and scope, not financial planning or budget documentation.
Question 62:
Which technique provides the MOST reliable audit evidence?
A) Inquiry of management
B) Direct observation and testing
C) Review of policy documentation
D) Analysis of organizational charts
Answer: B
Explanation:
Direct observation and testing provides the most reliable audit evidence because it involves the auditor personally witnessing activities or independently verifying data, reducing reliance on representations from others. Audit evidence reliability varies based on source, nature, and how it was obtained. Evidence obtained directly by the auditor through independent verification is more reliable than evidence obtained indirectly or through representation. Direct observation involves the auditor watching processes, examining physical assets, or witnessing transactions firsthand. For example, observing access control procedures in operation provides more reliable evidence than reading policy descriptions of those procedures. Testing involves the auditor performing procedures to verify data accuracy, system functionality, or control effectiveness. Re-performing calculations, tracing transactions through systems, or testing access controls provides objective evidence based on the auditor’s work rather than relying on others. Evidence from external sources is generally more reliable than internal evidence, and original documents are more reliable than copies. Documentary evidence in electronic or paper form is more reliable than oral evidence. Evidence obtained when internal controls are effective is more reliable than when controls are weak. Direct observation and testing rank highest in reliability because they minimize information risk from biased or inaccurate representations. However, practical constraints including time, cost, and access limitations mean auditors must often rely on less reliable evidence supplemented with direct testing where feasible. Auditors should obtain sufficient reliable evidence to support audit conclusions and opinions. When evidence reliability is lower, additional corroborating evidence should be obtained. Understanding evidence hierarchy helps auditors design procedures producing reliable conclusions. For critical audit findings or high-risk areas, auditors should emphasize direct observation and testing rather than relying primarily on inquiry or document review alone.
A is incorrect because inquiry of management provides the least reliable audit evidence as it relies entirely on representations that may be biased, incorrect, or incomplete. While inquiry is useful for understanding processes and gathering background information, it must be corroborated with more reliable evidence through observation, testing, or documentation review.
C is incorrect because review of policy documentation provides moderate reliability but documents may not reflect actual practices. Policies describe intended procedures but may not be followed in practice. Documentation review should be supplemented with testing to verify that documented controls are actually implemented and operating effectively.
D is incorrect because analysis of organizational charts provides evidence about organizational structure but is relatively low reliability regarding actual operations. Charts may be outdated and do not demonstrate whether appropriate segregation of duties or reporting relationships are followed in practice. Charts must be verified through testing and observation.
Question 63:
What is the PRIMARY objective of an IS audit follow-up review?
A) Identify new audit areas for next year
B) Verify that management has adequately addressed prior findings
C) Train junior audit staff
D) Reduce audit workload
Answer: B
Explanation:
The primary objective of an IS audit follow-up review is to verify that management has adequately addressed prior audit findings by implementing agreed-upon corrective actions or accepting identified risks. Follow-up is a critical component of the audit process ensuring that audit work produces tangible value by driving improvements rather than merely documenting problems. After issuing audit reports with findings and recommendations, management typically provides action plans committing to remediate identified issues within specified timeframes. Follow-up reviews verify whether management has fulfilled these commitments. The follow-up process involves reviewing management action plans against original audit findings, determining target dates for remediation from management commitments, conducting follow-up procedures at appropriate intervals after target dates, verifying implementation through testing rather than merely accepting management representations, assessing whether implemented actions adequately address root causes identified in findings, determining whether residual risk is acceptable where full remediation has not occurred, and reporting follow-up results to senior management and audit committee. Effective follow-up holds management accountable for addressing control deficiencies and information security risks. Without follow-up, audit findings may be ignored and known vulnerabilities may persist exposing the organization to risks auditors identified. Follow-up may reveal that some findings cannot be fully remediated due to cost, technical constraints, or business decisions, requiring management to formally accept residual risk. In such cases, follow-up ensures that risk acceptance is transparent and approved at appropriate levels. The frequency and formality of follow-up varies based on finding severity, with critical findings receiving more intensive follow-up. Follow-up demonstrates the audit function’s commitment to driving improvements and provides assurance to senior management and boards that audit recommendations are implemented. Strong follow-up processes track finding status, escalate unresolved items, and report trends in remediation effectiveness to governance bodies.
A is incorrect because identifying new audit areas for next year is part of audit planning, not the primary objective of follow-up reviews. While audit work may identify new risk areas, follow-up specifically focuses on verifying remediation of previously identified issues, not identifying future audit topics.
C is incorrect because training junior audit staff may occur during follow-up reviews but is not the primary objective. Follow-up focuses on verifying management action on findings. While junior staff may participate for development purposes, training is a secondary benefit, not the primary purpose of conducting follow-up.
D is incorrect because reducing audit workload is not an objective of follow-up reviews. Follow-up requires additional effort beyond the original audit to verify remediation. While effective remediation reduces future audit concerns in those areas, performing follow-up itself adds work rather than reducing it.
Question 64:
Which control is MOST effective for preventing unauthorized changes to production programs?
A) Segregation of duties between development and production
B) Annual review of program listings
C) Password protection on development tools
D) Backup of production programs
Answer: A
Explanation:
Segregation of duties between development and production environments is the most effective control for preventing unauthorized changes to production programs because it creates separation preventing developers from promoting their own code to production without independent review and approval. Proper segregation ensures that individuals who write or modify code cannot independently implement those changes in production systems where they affect real business operations. Effective segregation involves separate development, testing, and production environments with restricted access based on roles, change management processes requiring independent approval before production migration, access controls limiting production write access to designated change coordinators or production control personnel, removal of development staff access to production environments, logging and monitoring of production changes, and management review of changes implemented. When developers lack production access, changes must go through formal change processes where independent parties review and approve modifications before implementation. This provides opportunities to detect unauthorized or inappropriate changes before they impact production. The control addresses both accidental and intentional unauthorized changes by requiring multiple parties to participate in production updates. Change management processes typically require testing in non-production environments, peer review or quality assurance verification, approval from application owners or business management, documentation of change purpose and expected impact, back-out procedures if changes cause problems, and post-implementation review. This layered approach with segregation at its foundation prevents individual developers from bypassing controls and making unauthorized production changes. Organizations sometimes struggle with segregation when small IT teams make distinct roles difficult, but compensating controls like enhanced logging, monitoring, and management review can mitigate segregation weaknesses. Audit procedures to test segregation effectiveness include reviewing user access rights in development versus production, examining change logs to verify approvals, and testing whether developers can access production environments.
B is incorrect because annual review of program listings is a detective control that may identify unauthorized changes after the fact but does not prevent changes from occurring. Annual frequency is insufficient given the pace of system changes, and reviews detect rather than prevent unauthorized modifications. Real-time preventive controls are more effective.
C is incorrect because password protection on development tools protects development environments but does not prevent unauthorized production changes if developers have production access. Protecting development is important but the critical control is preventing developers from independently migrating code to production where unauthorized changes impact real operations.
D is incorrect because backup of production programs provides recovery capability if unauthorized changes cause problems but does not prevent the changes from occurring. Backups are detective and corrective controls enabling restoration to previous states, but they do not stop unauthorized modifications. Prevention through segregation is more effective than recovery.
Question 65:
What is the PRIMARY advantage of using Computer-Assisted Audit Techniques?
A) Reduce audit costs
B) Analyze large volumes of data efficiently
C) Eliminate need for audit documentation
D) Replace audit judgment
Answer: B
Explanation:
The primary advantage of using Computer-Assisted Audit Techniques is the ability to analyze large volumes of data efficiently, enabling auditors to examine entire populations rather than relying solely on sampling, and to perform complex analyses that would be impractical manually. CAATs include software tools and utilities that help auditors extract data from systems, perform calculations and comparisons, identify anomalies and exceptions, test controls, and analyze trends and patterns. Modern organizations maintain vast data repositories with millions of transactions and records that are impossible to review manually. CAATs enable auditors to analyze entire populations identifying all instances of specified conditions rather than sampling which might miss significant issues. For example, CAATs can examine all employee access rights to identify inappropriate segregation of duties, analyze all transactions to find duplicates or unusual patterns, test calculations on all records to verify accuracy, or compare data across systems to identify discrepancies. Common CAAT applications include data extraction tools pulling information from databases and files, data analysis software like ACL or IDEA designed specifically for audit use, generalized audit software performing various analytical procedures, utility software examining system configurations and logs, test data and parallel simulation testing application controls, and specialized tools for specific audit tasks like network scanning or log analysis. Benefits beyond data volume handling include increased audit coverage examining more data in less time, enhanced audit quality through systematic objective analysis, ability to perform continuous auditing and monitoring, and capability to analyze data from multiple sources simultaneously. CAATs supplement rather than replace auditor judgment, as auditors must still determine appropriate tests to perform, interpret results, and reach audit conclusions. Effective CAAT use requires auditors to understand data structures, have technical skills to use tools effectively, maintain tools with current capabilities, and document CAAT procedures and results appropriately. Organizations increasingly expect auditors to use CAATs given the digital nature of modern business operations and the limitations of traditional manual audit techniques when dealing with large datasets.
A is incorrect because while CAATs can improve efficiency and may reduce costs in some situations, cost reduction is not the primary advantage. CAATs require investment in software licenses, training, and skill development. The primary benefit is enhanced analysis capability and coverage, with efficiency as a secondary benefit.
C is incorrect because CAATs do not eliminate the need for audit documentation. Auditors must document CAAT procedures performed, results obtained, and conclusions reached. In fact, CAATs may increase documentation requirements as auditors must document tool configurations, data extraction methods, and analyses performed using automated techniques.
D is incorrect because CAATs do not replace audit judgment but rather support it by providing better information. Auditors must still exercise professional judgment to design appropriate tests, select data for analysis, interpret results, and draw audit conclusions. CAATs are tools that enhance but do not substitute for auditor expertise and judgment.
Question 66:
Which factor is MOST important when scheduling audit engagements?
A) Alphabetical order of business units
B) Risk assessment of audit areas
C) Preferences of business unit managers
D) Physical location proximity
Answer: B
Explanation:
Risk assessment of audit areas is the most important factor when scheduling audit engagements because audit resources should be allocated to areas with highest risk to provide assurance where it is most needed and where control failures would have greatest impact. Risk-based audit planning ensures that limited audit resources focus on areas where independent assessment provides maximum value to the organization. Risk assessment considers both inherent risk related to the nature of activities and control risk based on control environment strength. High inherent risk areas include those with significant financial impact, regulatory compliance requirements, high transaction volumes, complexity, rapid change, use of new technologies, or past control deficiencies. Control risk assessment evaluates management capability, control environment maturity, prior audit findings, and known control weaknesses. The combination of inherent and control risk determines overall audit risk and priority. Audit schedules typically categorize audit areas into risk tiers with specific frequencies such as annual audits for highest risk areas, biennial or triennial audits for moderate risk areas, and longer intervals or on-demand audits for lower risk areas. The audit universe including all auditable areas is periodically reassessed to reflect changing business conditions, new risks, and evolving organizational priorities. Risk-based scheduling is documented in multi-year audit plans showing when each area will be audited based on risk assessment. Plans are flexible to accommodate emerging risks requiring unscheduled audits and to adjust for resource constraints or changes in organizational priorities. Other considerations beyond risk that may influence scheduling include regulatory requirements mandating certain audit frequencies, management requests for audits addressing specific concerns, coordination with external auditors to avoid duplication, availability of key personnel during planned audit periods, and linkages between related audit areas benefiting from concurrent coverage. However, risk remains the primary driver of audit scheduling decisions. Audit committees and senior management expect audit plans to focus on significant risks, and auditors must justify decisions to audit lower-risk areas when high-risk areas remain unaudited. Effective risk-based planning demonstrates that the audit function understands organizational risks and allocates resources strategically to areas where assurance is most valuable.
A is incorrect because alphabetical order is arbitrary and bears no relationship to audit priorities or organizational risks. Using alphabetical order would waste audit resources on low-risk areas while potentially neglecting high-risk areas, defeating the purpose of risk-based audit planning and providing minimal value to the organization.
C is incorrect because business unit manager preferences should not drive audit scheduling. While maintaining good relationships with business units is important, auditors must maintain independence and schedule work based on risk assessment rather than management preferences. Allowing management to control audit schedules compromises independence.
D is incorrect because physical location proximity is a logistical consideration that may influence audit execution efficiency but should not determine audit priorities. Modern remote audit techniques reduce the importance of physical proximity. Scheduling should be driven by risk, not geographic convenience, ensuring highest-risk areas receive audit attention regardless of location.
Question 67:
What is the PRIMARY purpose of IT governance?
A) Reduce hardware costs
B) Align IT strategy with business objectives
C) Eliminate all IT risks
D) Increase IT staff productivity
Answer: B
Explanation:
The primary purpose of IT governance is to align IT strategy with business objectives, ensuring that technology investments and activities support organizational goals and deliver value while managing risks appropriately. IT governance provides the framework, processes, and structures through which organizations direct and control IT activities to support enterprise objectives. Effective IT governance addresses strategic alignment ensuring IT plans support business strategy, value delivery measuring and optimizing IT contribution to business outcomes, resource management optimizing IT investments and capabilities, risk management identifying and mitigating IT-related risks, and performance measurement tracking IT contribution through meaningful metrics. Governance mechanisms include IT steering committees with business and IT leadership providing strategic direction, portfolio management processes prioritizing investments based on business value, performance metrics and dashboards showing IT contribution to business goals, policies and standards establishing requirements for IT activities, and accountability structures defining roles and responsibilities for IT decisions. Without strong IT governance, organizations risk technology investments that do not support business needs, IT strategies disconnected from enterprise direction, duplication of effort and wasted resources, unmanaged risks from technology dependencies, and inability to demonstrate IT value to stakeholders. Governance differs from management in that governance sets direction and monitors results while management executes operations. The board and senior management are responsible for IT governance, not just IT management, recognizing that technology is integral to business success. Frameworks like COBIT provide structured approaches to IT governance implementation. Audit’s role includes assessing whether IT governance structures exist and function effectively, evaluating whether IT strategy aligns with business strategy, verifying that decision-making processes consider business perspectives, determining whether risk management covers IT risks appropriately, and assessing whether performance measurement demonstrates IT value. Strong IT governance correlation with better business outcomes including higher returns on IT investments, reduced risk of IT project failures, and improved regulatory compliance.
A is incorrect because reducing hardware costs is an operational efficiency objective, not the primary purpose of IT governance. While governance may lead to better resource utilization including cost optimization, its fundamental purpose is strategic alignment ensuring IT supports business goals rather than simply minimizing costs.
C is incorrect because eliminating all IT risks is neither possible nor the purpose of IT governance. Governance involves identifying, assessing, and managing risks to acceptable levels considering risk appetite and business objectives. Some risks are accepted when mitigation costs exceed benefits. Complete risk elimination would prevent innovation and technology use.
D is incorrect because increasing IT staff productivity is an operational management concern, not the primary governance purpose. While governance may indirectly improve productivity through better processes and resource allocation, the fundamental purpose is aligning IT with business objectives and ensuring IT delivers value to the organization.
Question 68:
Which finding should an IS auditor consider MOST critical?
A) Outdated policy documentation
B) Lack of disaster recovery testing
C) Missing procedure manuals
D) Inadequate office space for IT staff
Answer: B
Explanation:
Lack of disaster recovery testing should be considered most critical because untested disaster recovery plans create significant risk that the organization cannot recover critical systems and data after disruptions, potentially causing business failure. Disaster recovery capabilities are essential for business continuity when disasters, cyberattacks, or system failures occur. Organizations invest heavily in backup systems, recovery procedures, and business continuity plans, but these provide false assurance if they have not been tested and proven effective. Without testing, organizations do not know whether recovery procedures will work, staff can perform recovery activities, recovery time objectives can be met, data backups are complete and restorable, alternate facilities have adequate capacity, or dependencies between systems are understood. Common testing inadequacies include never conducting full recovery tests, testing only portions of recovery procedures, performing tests without time pressure that real disasters impose, not including all critical systems in tests, or conducting tests so infrequently that procedures become outdated or staff forget their roles. The absence of testing is critical because organizations falsely believe they are protected when recovery capabilities are unproven. When actual disasters occur, untested plans often fail due to documentation errors, missing dependencies, inadequate resources, or procedures that do not work as designed. Business impact can be catastrophic including extended system outages, data loss, inability to serve customers, financial losses, and in extreme cases business failure. Regulatory requirements in many industries mandate disaster recovery testing at specified frequencies. Audit procedures to evaluate disaster recovery testing include reviewing test plans and results, interviewing personnel about their roles, assessing test frequency and comprehensiveness, determining whether tests include critical systems and processes, evaluating whether test results led to plan improvements, and verifying that senior management is informed of testing outcomes. Recommendations for organizations lacking testing typically include developing comprehensive test plans, conducting initial tabletop exercises to familiarize staff with procedures, scheduling regular full-scale recovery tests, documenting test results including issues identified, and implementing corrective actions for deficiencies found during testing.
A is incorrect because while outdated policy documentation is a finding requiring remediation, it is less critical than untested disaster recovery which could result in business failure during disruptions. Outdated policies may indicate governance weaknesses but are less immediately threatening to business operations than inability to recover from disasters.
C is incorrect because missing procedure manuals are documentation deficiencies that should be addressed but are less critical than untested disaster recovery. Procedures can often be performed based on staff knowledge even without documentation, whereas untested recovery plans provide no assurance of recoverability during actual disasters.
D is incorrect because inadequate office space is a facilities and human resources concern that does not represent a critical business risk. While workspace issues may affect morale or efficiency, they do not threaten business continuity or create risk of catastrophic loss like untested disaster recovery capabilities.
Question 69:
What is the PRIMARY reason for conducting a risk assessment during audit planning?
A) Comply with audit standards requirements
B) Determine audit scope and resource allocation
C) Satisfy management expectations
D) Document audit work for files
Answer: B
Explanation:
The primary reason for conducting a risk assessment during audit planning is to determine appropriate audit scope and resource allocation by identifying areas with highest risk that require audit attention and areas where assurance is most valuable. Risk assessment is fundamental to effective audit planning because audit resources are limited and cannot cover all organizational activities in depth. Risk-based planning ensures resources focus where they provide maximum value. The audit planning risk assessment process involves identifying and cataloging audit areas including systems, processes, and business units, assessing inherent risk for each area considering factors like financial materiality, complexity, regulatory requirements, rate of change, and reliance on technology, evaluating control environment and management capability as indicators of control risk, determining overall audit risk combining inherent and control risk, prioritizing audit areas based on risk assessment, and allocating audit resources with more time and senior staff assigned to higher-risk areas. Risk assessment considers both the likelihood of control failures or adverse events and the potential impact if they occur. High-impact areas receive attention even if likelihood is lower, while high-likelihood concerns with minimal impact may receive less priority. The assessment also considers time since last audit, with areas not recently audited receiving higher priority. Risk assessment results drive decisions about which areas to include in the annual audit plan, depth of procedures to perform in each area, staffing assignments with experienced auditors on complex or high-risk engagements, and time budgets allocated to different audit areas. Planning documentation includes risk assessment results supporting scope decisions. Risk assessment is periodically updated as organizational conditions change, new risks emerge, or previous audits reveal unexpected issues. While risk assessment serves multiple purposes including standards compliance and documentation, the primary objective is making informed decisions about scope and resources to maximize audit value and provide assurance where it matters most. Without effective risk assessment, audits may focus on low-risk areas while missing significant risks, wasting resources and providing limited value to the organization.
A is incorrect because while audit standards do require risk assessment and compliance is important, this is not the primary reason for conducting risk assessment. The fundamental purpose is making better planning decisions about scope and resources. Standards require risk assessment because it is essential for effective planning, not because compliance itself is the goal.
C is incorrect because satisfying management expectations is not the primary purpose of risk assessment. While stakeholder expectations are considered in planning, risk assessment should be an independent professional judgment about where risks exist and where audit resources can provide most value. Auditors should not let management preferences override risk-based planning.
D is incorrect because documenting work for audit files is important for evidence and accountability but is not the primary reason for conducting risk assessment. Documentation captures the risk assessment results but the fundamental purpose is using those results to make better planning decisions about audit scope and resource allocation.
Question 70:
Which control is MOST important for maintaining data integrity in database systems?
A) Regular data backups
B) Access controls and authorization
C) Data encryption
D) Antivirus software
Answer: B
Explanation:
Access controls and authorization are the most important controls for maintaining data integrity in database systems because they prevent unauthorized or inappropriate modification of data by ensuring only authorized users can access and change data according to their legitimate business needs. Data integrity means data is accurate, complete, consistent, and maintained in a manner ensuring reliability. Access controls protect integrity through authentication verifying user identities before granting access, authorization limiting users to specific data and operations based on job responsibilities, segregation of duties preventing individuals from having incompatible access enabling fraud or errors, approval workflows requiring management authorization before critical data changes, and logging and monitoring tracking who accesses data and what changes are made. Without proper access controls, unauthorized users could modify data maliciously or accidentally, users could exceed their authorized authority and make inappropriate changes, lack of segregation could enable fraud through combined access to incompatible functions, and no audit trail would exist to detect or investigate inappropriate data changes. Authorization should be granular, limiting users to specific databases, tables, records, and operations (read, write, update, delete) necessary for their roles. Principle of least privilege dictates that users receive minimum access needed to perform their jobs. Privileged access to make structural changes, execute scripts, or perform administrative functions should be tightly restricted. Access controls alone do not ensure integrity if application logic contains errors allowing invalid data entry, but they prevent unauthorized parties from compromising data. Database controls supporting integrity also include referential integrity constraints ensuring relationships between tables remain valid, validation rules checking data meets defined requirements, transaction controls ensuring atomic operations that fully complete or fully roll back, and version controls tracking data changes over time. Audit procedures to assess database access controls include reviewing user access rights compared to job responsibilities, testing whether segregation of duties is enforced, evaluating access request and approval processes, examining logs for inappropriate access or modifications, and verifying that privileged access is limited to administrators.
A is incorrect because while regular data backups are critical for availability and recovery, they do not directly maintain integrity by preventing data corruption or unauthorized modifications. Backups provide recovery capability after integrity is compromised but do not prevent integrity issues. Access controls are preventive while backups are corrective.
C is incorrect because data encryption protects confidentiality by making data unreadable to unauthorized parties but does not directly ensure integrity. Encrypted data can still be modified inappropriately by authorized users or corrupted through system errors. Encryption prevents disclosure but other controls like access controls and checksums maintain integrity.
D is incorrect because antivirus software protects against malware that could corrupt data but is not the most important integrity control for database systems. Malware is one threat among many, while access controls address the broader concern of preventing unauthorized or inappropriate data modifications from any source including insider threats.
Question 71:
What is the PRIMARY objective of an IS audit of business continuity planning?
A) Verify compliance with industry standards
B) Assess ability to maintain operations during disruptions
C) Reduce insurance costs
D) Train staff on emergency procedures
Answer: B
Explanation:
The primary objective of an IS audit of business continuity planning is to assess the organization’s ability to maintain or quickly resume critical business operations during and after significant disruptions such as disasters, cyberattacks, or system failures. Business continuity planning encompasses disaster recovery for IT systems and broader organizational resilience ensuring critical business functions continue with minimal interruption. Audit objectives include determining whether the organization has identified critical business processes and their IT dependencies, assessed risks that could disrupt operations, developed recovery strategies with acceptable recovery time and point objectives, documented procedures for responding to various disruption scenarios, allocated resources including backup facilities, staff, and technology, trained personnel on their roles during disruptions, tested plans to verify effectiveness and identify weaknesses, maintained plans with current information as systems and business processes change, and established governance ensuring senior management and boards oversee business continuity. Audit procedures evaluate the business impact analysis identifying critical processes and their recovery priorities, review recovery strategies for feasibility and adequacy, examine backup and recovery capabilities for systems and data, assess whether recovery time objectives align with business requirements, evaluate alternate site arrangements for adequacy and availability, review crisis management and communication plans, test disaster recovery and business continuity procedures, interview staff about awareness and readiness, and determine whether plans cover various disruption scenarios. The audit assesses whether the organization can actually maintain operations during disruptions, not merely whether plans exist on paper. Untested plans, inadequate resources, outdated procedures, or staff unfamiliar with their roles create risk that disruptions will cause extended outages and business impact. Audit findings often include inadequate testing frequency, incomplete documentation, lack of staff training, insufficient backup capacity, or recovery time objectives that do not meet business needs. Recommendations focus on improving capability to maintain operations during adverse events, protecting the organization from business interruption losses.
A is incorrect because while audits may reference industry standards like ISO 22301 as benchmarks, verifying standards compliance is not the primary objective. The fundamental objective is assessing whether the organization can actually continue operations during disruptions. Standards compliance is a means to achieve resilience, not the end goal.
C is incorrect because reducing insurance costs is not an audit objective. While effective business continuity planning may positively affect insurance premiums, auditors assess operational capability and risk management effectiveness, not insurance economics. Cost reduction is not the purpose of continuity planning audits.
D is incorrect because training staff on emergency procedures is management’s responsibility, not an audit objective. Auditors assess whether adequate training exists but do not conduct training themselves. Audits evaluate the effectiveness of training programs management has implemented, not provide training to staff.
Question 72:
Which audit approach is MOST appropriate for evaluating application controls?
A) Review system documentation only
B) Inquiry of programmers and users
C) Testing controls with sample transactions
D) Analysis of organizational charts
Answer: C
Explanation:
Testing controls with sample transactions is the most appropriate audit approach for evaluating application controls because it provides direct evidence of whether controls operate effectively by verifying that the application processes transactions correctly and enforces intended control logic. Application controls are automated controls embedded in software that ensure transaction validity, completeness, accuracy, and authorization. Testing approaches include selecting sample transactions representing various scenarios and transaction types, inputting test data through the application to verify proper processing, examining how the application handles invalid or unauthorized transactions, verifying that application edits and validations function correctly, confirming that calculations and processing logic are accurate, testing interfaces between applications to verify data passes correctly, and evaluating error handling and exception processing. Test data technique involves creating fictitious transactions with known characteristics including both valid and invalid elements to verify that the application processes valid transactions correctly and rejects or flags invalid ones. Auditors design test cases covering various control scenarios like missing required fields, values outside acceptable ranges, unauthorized users attempting transactions, duplicate transactions, and calculations requiring verification. Parallel simulation reprocesses actual production data through auditor-controlled programs to verify results match production processing. Integrated test facility includes test entities in production databases, allowing continuous control testing. These approaches provide objective evidence of control effectiveness through the auditor’s own testing rather than relying on representations. The testing demonstrates whether controls are not only designed appropriately but actually function as intended in the production environment. Sample size and selection depend on control effectiveness assessment, transaction volumes, and risk. Higher-risk applications or controls with past deficiencies require more extensive testing. Documentation of test procedures, data used, results obtained, and conclusions reached is essential. Testing should be performed with current application versions in production environments, as controls may function differently in development versus production or may have been changed since documentation was created. Follow-up testing investigates anomalies or control failures identified during testing.
A is incorrect because reviewing system documentation only provides evidence of control design but not operating effectiveness. Documentation may be outdated, describe controls that were never implemented, or fail to identify informal procedures bypassing documented controls. Documentation review should be supplemented with testing to verify controls operate as documented.
B is incorrect because inquiry of programmers and users is the least reliable form of audit evidence as it relies entirely on representations that may be biased or incorrect. While inquiry provides useful information for understanding application functionality, it must be corroborated through testing. Users may not fully understand control operation or may describe how processes should work rather than actual operation.
D is incorrect because analysis of organizational charts provides information about reporting relationships and organizational structure but does not evaluate application controls. Organizational charts are more relevant for assessing governance and segregation of duties at an organizational level, not the automated controls within applications processing transactions.
Question 73:
What is the PRIMARY reason for conducting entrance and exit conferences during audits?
A) Comply with audit procedures
B) Facilitate communication between auditors and auditees
C) Document audit hours
D) Socialize with business units
Answer: B
Explanation:
The primary reason for conducting entrance and exit conferences during audits is to facilitate communication between auditors and auditees, ensuring shared understanding of audit objectives, scope, findings, and recommendations. Entrance conferences at the beginning of audits establish communication and set expectations. During entrance meetings, auditors introduce team members and their roles, explain audit objectives and why the area was selected, outline planned scope including processes, systems, and controls to be reviewed, discuss audit methodology and approach, establish timeframes for fieldwork and key milestones, identify key auditee personnel and subject matter experts, request access to documentation, systems, and personnel, address logistical arrangements for workspace and systems access, and answer auditee questions about the audit. Entrance conferences set a professional collaborative tone for the engagement. Clear communication about objectives and scope prevents misunderstandings and helps auditees prepare appropriate information. Exit conferences at the end of fieldwork discuss preliminary findings before finalizing reports. Auditors present findings including control weaknesses, risks, and observations, explain the basis for findings including evidence obtained, discuss potential recommendations, allow auditees to provide additional information or context auditors may not have considered, clarify any factual misunderstandings, and outline next steps including report drafting and management response. Exit conferences are critical for ensuring audit findings are accurate and complete before being formalized in reports. Auditees may provide explanations that alter auditors’ assessments, identify compensating controls not initially apparent, or correct factual errors. The dialogue often leads to more practical recommendations as auditees provide input about feasibility and business impact. Professional standards recommend entrance and exit conferences as best practices promoting transparent communication. Benefits include better audit quality through auditee input, improved relationships between audit and business units, increased likelihood that management will accept findings and implement recommendations, and reduced surprises when formal reports are issued.
A is incorrect because while conferences may be included in audit procedures, compliance with procedures is not the primary reason for conducting them. The fundamental purpose is facilitating communication and understanding between auditors and auditees. Procedures require conferences because communication is important, not because procedure compliance itself is the goal.
C is incorrect because documenting audit hours is an administrative time tracking function unrelated to the purpose of entrance and exit conferences. Time documentation occurs through timesheets and project management systems, not through conferences whose purpose is communication about audit objectives, scope, and findings.
D is incorrect because socializing with business units is not the purpose of professional audit conferences. While maintaining constructive relationships is beneficial, entrance and exit conferences have specific professional objectives related to communicating audit plans and findings, not social interaction. Professional communication differs from socialization.
Question 74:
Which factor is MOST important when evaluating the independence of an IS auditor?
A) Technical certifications held
B) Reporting relationship and organizational position
C) Years of experience in auditing
D) Salary and compensation level
Answer: B
Explanation:
Reporting relationship and organizational position is the most important factor when evaluating IS auditor independence because it determines whether auditors have the organizational authority, freedom from management pressure, and objectivity necessary to report findings without bias or interference. Independence is fundamental to audit effectiveness because stakeholders rely on auditors to provide objective assessments unclouded by conflicts of interest or management influence. Structural independence requires auditors to report to levels of authority that can act on audit findings without being subject to those being audited. Best practice involves audit functions reporting to audit committees of the board or equivalent governance bodies rather than to operational management. This reporting structure ensures auditors can escalate findings about senior management without fear of retaliation. When auditors report to management they audit, independence is compromised because managers could pressure auditors to soften findings or face career consequences. Auditors also must not audit areas where they previously worked or have personal relationships creating conflicts of interest. Rotation policies prevent auditors from becoming too familiar with auditees or developing relationships affecting objectivity. Financial independence means auditor compensation should not be linked to audit outcomes or influenced by auditees. Auditors should not have financial interests in audited areas such as owning stock in vendors whose controls they evaluate. Organizational position involves whether audit has sufficient authority to access all necessary records and systems without restrictions, whether audit reports reach appropriate governance levels, and whether audit can set its own priorities based on risk rather than management preferences. Evaluating independence involves reviewing reporting lines documented in the audit charter, assessing whether auditors face restrictions on scope or access, determining whether compensation or career advancement could be influenced by audit outcomes, identifying any personal or financial relationships creating conflicts, and evaluating whether previous roles or current responsibilities create conflicts with audit assignments. Independence both in fact and in appearance is necessary because even perception of conflicts undermines audit credibility.
A is incorrect because technical certifications like CISA demonstrate competence and knowledge but do not address independence. A highly certified auditor lacking organizational independence cannot provide objective assessments. Certifications are important for capability but separate from independence which concerns objectivity and freedom from conflicts.
C is incorrect because years of experience indicate expertise and knowledge but not independence. Experience may actually create independence concerns if auditors become too familiar with auditees or develop relationships affecting objectivity. Experience relates to auditor competence while independence concerns organizational structure and absence of conflicts.
D is incorrect because salary and compensation levels are not primary independence indicators unless compensation is linked to audit outcomes or influenced by auditees. Appropriate compensation is important for attracting qualified auditors but the amount itself does not determine independence. The structure of compensation and who controls it matters more than the level.
Question 75:
What is the PRIMARY purpose of audit sampling?
A) Reduce audit costs
B) Draw conclusions about populations from testing subsets
C) Avoid testing high-risk transactions
D) Meet minimum audit hour requirements
Answer: B
Explanation:
The primary purpose of audit sampling is to draw conclusions about entire populations by testing representative subsets of items, allowing auditors to form opinions about population characteristics without examining every item, which would be impractical given time and resource constraints. Sampling is necessary because modern organizations process millions of transactions making 100 percent testing impossible in most audits. Statistical and non-statistical sampling approaches allow auditors to examine samples and project results to populations with known or assessed confidence levels. Sampling methodology involves defining the population and sampling unit, determining sample objectives such as testing control effectiveness or transaction accuracy, selecting sampling approach either statistical with mathematically determined sample sizes and random selection or non-statistical using auditor judgment, determining sample size considering factors like desired confidence level, expected error rates, and population variability, selecting sample items through random selection for statistical sampling or judgmental selection for non-statistical approaches, performing audit procedures on sample items, evaluating results including identified errors or control failures, and projecting sample results to the population forming conclusions about whether the population as a whole contains material errors or control failures. Sampling risk exists that sample results may not represent the population accurately, but statistical sampling allows quantification of this risk. Factors affecting sample size include required confidence level where higher confidence requires larger samples, expected error rate where higher expected errors require larger samples for accurate assessment, tolerable error rate with tighter tolerances requiring more testing, and population size which has less effect than other factors especially for large populations. Auditors must ensure samples are representative of populations, avoiding bias from systematic selection that could exclude certain transaction types. Sample documentation includes population definition, sampling method and rationale, sample size calculation, items selected, procedures performed, errors identified, evaluation of results, and conclusions reached. When sample results indicate high error rates or control failures, auditors must assess whether findings require expanding testing, qualifying audit opinions, or reporting significant deficiencies to management.
A is incorrect because while sampling may reduce costs compared to 100 percent testing, cost reduction is not the primary purpose. The fundamental reason for sampling is that complete population testing is impractical. Even with unlimited resources, sampling would be used for efficiency. The purpose is drawing valid conclusions from manageable testing, not merely saving money.
C is incorrect because sampling should not be used to avoid testing high-risk transactions. In fact, high-risk items should receive increased attention through stratification or separate targeted testing rather than being included in routine samples. Sampling aims to test representative items, not avoid important testing.
D is incorrect because meeting minimum audit hour requirements is not a purpose of sampling. Hour requirements may exist for budgeting but sampling methodology is driven by achieving audit objectives and obtaining sufficient evidence. Sample sizes are determined by statistical or professional judgment criteria related to required confidence, not arbitrary hour targets.
Question 76:
Which control is MOST important for protecting against social engineering attacks?
A) Firewall configuration
B) Security awareness training
C) Data encryption
D) Intrusion detection systems
Answer: B
Explanation:
Security awareness training is the most important control for protecting against social engineering attacks because these attacks exploit human psychology and behavior rather than technical vulnerabilities, making user awareness and vigilance the primary defense. Social engineering involves manipulating people into revealing confidential information, providing access, or performing actions that compromise security. Common techniques include phishing emails deceiving users into clicking malicious links or providing credentials, pretexting where attackers create false scenarios to extract information, baiting with infected media or downloads exploiting curiosity, tailgating where unauthorized persons follow employees into secure areas, and phone-based attacks impersonating IT support or executives to obtain information. These attacks succeed when users lack awareness of threats and fail to follow security procedures. Effective security awareness training educates users about social engineering tactics and indicators, teaches how to verify requestor identities before providing information or access, establishes procedures for reporting suspicious contacts, provides simulated phishing exercises testing and reinforcing awareness, creates culture where security is everyone’s responsibility, and updates training regularly as attack methods evolve. Training should be mandatory for all personnel, conducted at hiring and periodically thereafter, tailored to roles with higher-risk users receiving more intensive training, measured through assessments and simulated attack testing, and reinforced through ongoing communications and awareness campaigns. Organizations may conduct simulated phishing campaigns sending fake phishing emails to employees and tracking who clicks links or provides credentials. Results identify users needing additional training and measure overall program effectiveness. Training effectiveness metrics include click rates on simulated phishing, reported suspicious emails, password sharing incidents, and tailgating observations. Technical controls like email filtering reduce phishing emails reaching users but cannot eliminate social engineering. Strong authentication helps limit damage from compromised credentials but does not prevent users from being socially engineered into approving fraudulent transactions or disclosing information. Human judgment and awareness remain essential because attackers continually adapt techniques, no technical control can protect against all social engineering, and many attacks exploit legitimate access rather than technical vulnerabilities.
A is incorrect because firewall configuration protects against network-based technical attacks but does not address social engineering which manipulates users rather than exploiting technical vulnerabilities. Firewalls cannot prevent users from voluntarily providing information or access to attackers who use psychological manipulation.
C is incorrect because data encryption protects confidentiality of stored and transmitted data but does not prevent social engineering. Encryption protects data if stolen but does not stop users from being manipulated into providing access to encrypted data or revealing encryption keys. Social engineering bypasses encryption by targeting human vulnerabilities.
D is incorrect because intrusion detection systems monitor for technical attack patterns but cannot detect social engineering which involves authorized users unknowingly helping attackers. IDS may detect some subsequent malicious activity but cannot prevent the initial social engineering compromise resulting from human manipulation.
Question 77:
What is the MOST important consideration when determining audit report distribution?
A) Length of the audit report
B) Sensitivity of findings and need-to-know basis
C) Cost of printing and distribution
D) Preferences of auditees
Answer: B
Explanation:
Sensitivity of findings and need-to-know basis is the most important consideration when determining audit report distribution because audit reports often contain confidential information about control weaknesses, vulnerabilities, or business operations that could be exploited if disclosed to inappropriate parties. Distribution decisions must balance transparency ensuring appropriate stakeholders receive information they need with confidentiality protecting sensitive details from unnecessary disclosure. Audit reports typically contain different types of information requiring different distribution. Executive summaries with high-level findings may be distributed broadly to senior management and boards. Detailed findings with technical vulnerability information should have restricted distribution limited to individuals responsible for remediation and oversight. Highly sensitive findings like fraud, significant compliance violations, or critical security vulnerabilities may require special handling with distribution limited to audit committees, senior executives, and legal counsel. Distribution decisions consider who needs information to take action or provide oversight, who is responsible for implementing recommendations, who has legitimate governance or regulatory needs for audit results, and who could misuse information if inappropriately disclosed. Standard distribution lists typically include audit committee members receiving all audit reports, senior management receiving reports on their areas of responsibility, management of audited areas receiving detailed findings requiring their remediation, board members receiving summaries of significant findings, and external auditors receiving reports relevant to financial statement audits. Some reports may be provided to regulators when required or when findings indicate compliance issues. Distribution should be documented establishing who received reports and when. Access controls on electronic reports prevent unauthorized access. Some organizations classify audit reports with labels like confidential or restricted indicating handling requirements. Inappropriate distribution risks include attackers obtaining vulnerability details, competitors accessing business information, or public disclosure causing reputational damage. Over-restriction risks insufficient transparency and failure to inform stakeholders who need awareness of significant risks. Auditors should consult legal counsel and senior management on distribution of particularly sensitive reports.
A is incorrect because report length is a readability and communication effectiveness consideration but not relevant to distribution decisions. Both short and long reports may contain sensitive information requiring controlled distribution. Length relates to how information is presented, while distribution concerns who should receive information.
C is incorrect because cost of printing and distribution is an administrative concern that should not drive decisions about who receives audit reports. In modern electronic distribution, costs are minimal. Even with paper reports, ensuring appropriate stakeholders receive necessary information is far more important than saving printing costs.
D is incorrect because preferences of auditees should not determine distribution. Auditees might prefer limited distribution to avoid scrutiny but audit results must reach appropriate governance and oversight levels. Distribution is determined by stakeholder needs and information sensitivity, not by auditee preferences that could reflect attempts to suppress findings.
Question 78:
Which audit procedure is MOST effective for verifying segregation of duties?
A) Review policy documentation
B) Interview personnel about their responsibilities
C) Analyze user access rights across systems
D) Examine organizational charts
Answer: C
Explanation:
Analyzing user access rights across systems is the most effective audit procedure for verifying segregation of duties because it provides direct evidence of what access users actually have and whether incompatible functions are combined, rather than relying on representations or documentation that may not reflect reality. Segregation of duties is a fundamental control preventing individuals from having access to incompatible functions that could enable fraud or errors without detection. Incompatible combinations include initiating transactions and approving them, having access to assets and maintaining records of those assets, executing transactions and recording them, and writing program code and migrating it to production. Effective segregation requires appropriate division of duties at the business process level and appropriate access controls enforcing the segregation in systems. Audit procedures to verify segregation include extracting user access rights from all systems involved in a business process, identifying functions each user can perform based on access rights, comparing individual user access against segregation requirements to identify conflicts, using segregation of duties matrices defining incompatible function combinations, analyzing whether compensating controls exist where segregation cannot be achieved, testing samples of transactions to verify approvals by separate individuals, and reviewing logs to detect individuals performing incompatible functions. Access analysis is most reliable because it examines actual system permissions rather than relying on what policies say or what people claim. Users may have access they do not remember or that was granted without proper authorization. Administrators may have inappropriately granted access. Audit tools can automatically analyze access rights across multiple systems identifying conflicts that would be difficult to detect manually. For example, analysis might reveal that a user can create vendor records in the master file and also enter invoices for those vendors, creating opportunity to establish fictitious vendors and approve fraudulent payments. Role-based access control simplifies segregation if roles are designed without incompatible permissions, but role assignments must still be reviewed. Compensating controls like management review of transactions or dual authorization may mitigate segregation conflicts when duty separation is impractical.
A is incorrect because policy documentation describes intended segregation of duties but provides no evidence of actual implementation. Policies may be outdated, not followed, or contradicted by system access that was granted inappropriately. Documentation review should be supplemented with testing of actual access rights to verify policies are implemented.
B is incorrect because interviewing personnel provides the least reliable evidence as people may not fully understand all functions they can perform, may describe ideal states rather than reality, or may be reluctant to admit they have inappropriate access. Inquiry should be corroborated with objective evidence from access rights analysis.
D is incorrect because organizational charts show reporting relationships and organizational structure but do not demonstrate whether individuals have system access to perform incompatible functions. Charts may show proper organizational segregation while system access still allows duty conflicts. Charts should be validated through access testing.
Question 79:
What is the PRIMARY purpose of audit working papers?
A) Satisfy filing requirements
B) Document audit procedures, evidence, and conclusions
C) Train new audit staff
D) Fill audit time budgets
Answer: B
Explanation:
The primary purpose of audit working papers is to document audit procedures performed, evidence obtained, and conclusions reached, providing the foundation for audit opinions and enabling review of audit quality and compliance with standards. Working papers serve as the official record of audit work supporting findings and recommendations in audit reports. Comprehensive documentation is essential for audit quality, accountability, and defensibility. Working paper purposes include providing evidence that audits were properly planned and supervised, documenting the audit approach and procedures performed, recording evidence obtained during fieldwork, supporting audit findings, conclusions, and recommendations, enabling supervisory review of audit work quality, facilitating future audits by providing history and context, demonstrating compliance with audit standards and organizational policies, protecting auditors and organizations if audit work is challenged, and serving as training materials for staff development. Working papers should be sufficiently detailed that an experienced auditor with no previous connection to the audit can understand what was done, what was found, and what was concluded. Contents typically include audit planning documentation like risk assessments and audit programs, evidence obtained through testing, analysis, and inquiry, descriptions of procedures performed and samples selected, evaluation of control effectiveness and identified weaknesses, analysis supporting findings and recommendations, supervisory review notes and sign-offs, and correspondence with auditees. Organization systems like cross-referencing enable navigation between related working papers and linkage from working papers to findings in final reports. Indexing and filing conventions ensure working papers can be located efficiently. Standards require working papers to be retained for specified periods such as seven years supporting future reference and regulatory or legal requirements. Quality and completeness of working papers directly affects audit credibility. Poorly documented audits create risks that work cannot be supported if challenged, that supervisors cannot adequately review quality, and that findings may be successfully disputed by management. Electronic working paper systems improve organization, search, review, and storage compared to paper files.
A is incorrect because satisfying filing requirements is a secondary administrative purpose of working papers, not the primary reason for creating them. Working papers must meet retention standards but the fundamental purpose is documenting work performed and evidence obtained to support audit conclusions. Filing requirements exist because documentation is important.
C is incorrect because while working papers may be used for training new staff, this is a beneficial secondary use, not the primary purpose. Training value comes from well-documented work, but papers are created primarily to document audits and support findings, not to serve as training materials.
D is incorrect because filling audit time budgets is not a purpose of working papers. Time budgets drive resource allocation but working papers document substantive audit work, not time spent. Creating documentation to justify hours would be inappropriate. Working papers should reflect necessary procedures and evidence regardless of time considerations.
Question 80:
Which factor is MOST important when prioritizing audit findings in a report?
A) Alphabetical order of findings
B) Risk and potential business impact
C) Ease of remediation
D) Management preferences
Answer: B
Explanation:
Risk and potential business impact is the most important factor when prioritizing audit findings in reports because stakeholders need to understand which findings represent the greatest threats to the organization and require most urgent attention. Audit reports typically contain multiple findings of varying significance and prioritization helps management and boards allocate remediation resources appropriately and understand which issues demand immediate attention versus those that can be addressed over longer timeframes. Prioritization criteria include potential financial impact if the risk materializes, likelihood of the risk occurring based on threat environment and control weaknesses, regulatory or compliance implications with legal or regulatory consequences, reputational impact if issues became public, complexity and time required for remediation, and potential for control failures to go undetected for extended periods. Common prioritization schemes use categories like critical or high risk for findings with significant potential impact requiring immediate management attention, medium or moderate risk for findings with meaningful but less severe impact requiring timely remediation, and low risk for findings with minimal impact that should be addressed but are not urgent. Critical findings often include lack of segregation enabling fraud, absence of change management controls allowing unauthorized program modifications, inadequate access controls protecting sensitive data, missing or untested disaster recovery capabilities, significant compliance violations exposing the organization to penalties, and unpatched critical vulnerabilities enabling system compromise. Report structure typically presents findings in priority order with highest risk items first, ensuring senior management and boards immediately see most important issues rather than having to read through entire reports to identify critical matters. Prioritization should be objective and based on professional judgment about actual risk rather than being influenced by management preferences to downplay significant findings. Audit standards require findings to be put in appropriate context indicating their significance. Management responses often include target remediation dates with more aggressive timelines for higher-priority findings. Audit follow-up also prioritizes critical findings for earlier re-examination to verify remediation occurred.
A is incorrect because alphabetical order is arbitrary and provides no information about finding importance or urgency. Using alphabetical order could place critical findings at the end of reports where they might receive insufficient attention. Prioritization should be based on risk significance, not arbitrary ordering schemes.
C is incorrect because ease of remediation should not determine finding priority. Some critical high-risk findings may be difficult and time-consuming to remediate but still demand immediate attention and resource commitment. Prioritizing based on ease creates risk that difficult but important issues are deferred while trivial easy fixes receive attention.
D is incorrect because management preferences should not drive finding prioritization which must be based on objective risk assessment. Management might prefer to downplay significant findings or emphasize minor issues that are easy to fix. Auditors must maintain independence and prioritize based on actual risk and impact, not stakeholder preferences.
