A performance audit directly addresses the CFO’s concern by evaluating the economy, efficiency, and effectiveness of the new production line. It involves analyzing operational data to determine if the projected benefits (efficiency gains, cost savings) are being achieved, providing actionable insights for management.

The core risk is financial reporting integrity. The ability to both execute a transaction and alter the data used to value it creates a opportunity for the analyst to conceal errors or manipulate profits/losses. The supervisory review is ineffective because it relies on the potentially corrupted data, making material misstatement the most significant and direct risk.

The fundamental assurance role of internal audit in ESG reporting is to verify the reliability of the information being published. Stakeholders rely on these disclosures, making the accuracy, completeness, and validity of the underlying data the paramount concern. Auditing the governance and controls over data collection and reporting is a core and appropriate objective.

While cost is a factor, benchmarking based solely on internet searches provides unreliable and non-specific data. Effective assessment requires reviewing the actual contract (SLA), performing direct observation or testing at the provider (where permitted), and evaluating the company’s own governance and oversight processes. Informal benchmarking lacks context and does not directly assess the control environment or performance of the specific provider.

The auditor must first gather facts and understand the nature of the problem before jumping to solutions. Interviewing the users and support staff provides crucial context about the symptoms (e.g., is it truly a capacity issue, a software bug, a network problem, or a user error?). This information-gathering step is essential for defining the scope and objective of any subsequent detailed audit work.

A BCP that has never been fully tested provides no assurance that it will work in an actual disaster. It is a theoretical document. While the other options are concerns (proximity of sites, outdated plans, potentially long RTOs), the complete lack of testing is the most fundamental flaw because it leaves the organization’s ability to recover entirely unproven and highly risky.

The root cause is identified as inefficiency in the approval workflow. The recommendation should directly target improving that process. An automated workflow system with escalations (e.g., notifying a supervisor if an approver does not act within a set time) is a proactive, process-level control designed to eliminate the bottleneck causing the late payments.

The QAIP, as defined by the IPPF (Standard 1300), is a comprehensive program designed to provide assurance that the internal audit activity operates in accordance with the Definition of Internal Auditing, the Code of Ethics, and the Standards, and adds value. Its core purpose is the ongoing assessment and improvement of the audit function’s effectiveness, not just individual tasks or qualifications.

When potential fraud involving a manager is suspected, the auditor must proceed with caution to avoid alerting the suspect, compromising the investigation, or creating legal risk. The correct step is to escalate the matter confidentially to the CAE. The CAE, in consultation with legal counsel and possibly senior management, will then determine the appropriate investigative path, which may involve specialized forensic auditors.

A performance audit directly addresses the CFO’s concern by evaluating the economy, efficiency, and effectiveness of the new production line. It involves analyzing operational data to determine if the projected benefits (efficiency gains, cost savings) are being achieved, providing actionable insights for management.0