Certified Government Auditing Professional (CGAP) Practice Exam

What factors are considered by the audit organization for audit follow-up?

1. Amount of risk if deficiencies are uncorrected

2. Complexity of management's corrective plan

3. Time elapsed since audit report issuance

4. All of the above

The correct answer is: All of the above

In determining which factors to consider for audit follow-up, the audit organization evaluates several critical aspects to ensure that deficiencies identified in an audit are adequately addressed. Understanding each of these factors is essential for effective audit follow-up. The amount of risk if deficiencies are uncorrected is a primary concern, as unresolved issues can have significant implications for the organization, including financial loss, legal issues, or reputational damage. By assessing the risk level, auditors can prioritize which findings require immediate attention, thereby ensuring that resources are allocated to the most pressing issues. Complexity of management's corrective plan also plays a vital role in audit follow-up. A well-structured and feasible corrective plan can lead to effective resolution of issues. Conversely, a complex or unclear plan may indicate potential delays or inadequacies in addressing the problems. By analyzing this complexity, auditors can determine additional support or guidance that may be necessary as part of the follow-up process. The time elapsed since audit report issuance is another crucial consideration. This factor provides context regarding how long management has had to respond to the audit findings. A longer time frame without resolution could signify ongoing issues or insufficient management action, which may warrant a more thorough follow-up. Each of these factors contributes to a comprehensive approach to audit follow-up