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The sections of the workpapers most likely to require changes after considering an important compensating control would include the effect of the control weakness, the conclusion on the control weakness, and the recommendation for the control weakness. The effect might be mitigated by the compensating control, leading to a different conclusion and potentially altering the recommendation.

IIA References:

IIA Standard 2310: Identifying Information requires that sufficient, reliable, relevant, and useful information must be obtained to support the engagement results. If a compensating control was not adequately considered, the conclusion and recommendations related to the control weakness might need to be revised to reflect a more accurate assessment.

The Practice Guide on Evaluating Internal Controls suggests that all relevant controls, including compensating controls, should be considered when forming conclusions and making recommendations.

When the CAE determines whether the internal audit activity has confirmed the status of all management's corrective actions, it helps in assessing residual risk. Residual risk is the risk that remains after management's actions to mitigate inherent risk. By confirming the status of corrective actions, the CAE can evaluate whether the risks identified during the audit have been adequately addressed and what level of risk still exists, ensuring that the internal control environment is effective and that management's risk responses are appropriate.References: COSO's Enterprise Risk Management Framework and The IIA's International Standards for the Professional Practice of Internal Auditing.

When an assurance engagement concludes with no key controls being compromised but notes some opportunities for improvement, the most appropriate approach for the chief audit executive (CAE) is to send the final report to operational management. This ensures that the responsible management can act on the improvement opportunities. Additionally, notifying senior management and the audit committee that no significant findings were identified keeps them informed without overloading them with less critical details, maintaining transparency and proper communication channels. References: IIA Standard 2400 – Communicating Results, IIA Practice Guide – Communicating Assurance Engagement Results

According to IIA Standards, acceptable practices for testing conformance through a quality assurance review include conducting a self-assessment with independent validation (2) and arranging for reciprocal peer review with another CAE (4). These methods provide a cost-effective and practical approach to ensuring compliance with professional standards, especially for small internal audit activities. Using an external service provider (1) and arranging for a review by qualified employees outside of the IAA (3) are also valid, but self-assessment with independent validation and peer review are specifically highlighted for smaller IAAs. References: IIA Standard 1312 – External Assessments, IIA Practice Guide – Quality Assurance and Improvement Program