Management is concerned with a recent increase in expenditures and lower profits at a division and has asked the internal audit activity to perform an operational audit of the division. Management would like to have the audit completed as quickly as possible and has asked the internal audit activity to allocate all possible resources to the task. The chief audit executive is concerned with the time pressure since the internal audit activity is heavily involved in a major legal compliance audit that had been requested by the audit committee.

Which of the following factors would be considered the least important in deciding whether existing internal audit resources should be moved from the ongoing legal compliance audit to the management-requested audit of a division?

a.

The potential for significant regulatory fines associated with the legal compliance audit.

b.

A financial audit of the division by the external auditor a year ago.

c.

The increase in expenditures at the division for the past year.

d.

The potential of fraud associated with the legal compliance audit.