Risks of functional audits

Question

Accepted Answer

Functional audits carry risks that can impact the organization.

Lack of objectivity: Auditors may have biases or conflicts of interest that can affect the audit process.
Limited scope: Functional audits may focus on specific areas, potentially overlooking broader organizational issues.
Resistance to change: Audits can uncover deficiencies or areas for improvement, which may be met with resistance from employees or management.
Negative impact on morale: The audit process can create a sense of scrutiny and distrust among employees.
Inadequate follow-up: If audit recommendations are not properly implemented, the organization may not realize the intended benefits.

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