An auditor became aware that senior management’s risk assessment had recently changed after the organization...

A significant change in management’s risk assessment following the introduction of new products warrants discussion between the CAE, senior management, and the board. New products can change strategic, operational, compliance, technology, financial, and reputational exposures and therefore may affect the organization’s overall risk profile as well as internal audit priorities. Before immediately reallocating audit resources or determining detailed testing procedures, the CAE should understand the nature and significance of the changed risks and obtain relevant perspectives from governance and management stakeholders. These discussions help internal audit maintain alignment with organizational objectives and ensure that risk-based planning reflects material changes in the business environment. Therefore, meeting with the board and senior management to discuss the impact of the new products on risk management is the appropriate next step.