Problem: Richard Folger, CEO of Folger Group (FG), is very annoyed about a drop of more than 20% in his business's market share, owing to a decrease in the quality of its products in the second half of the fiscal year. Confused about why an internal audit did not detect the sudden drop in quality, he met with his chief audit executive (CAE). The CAE explained that the internal audit department is staffed according to the responsibilities identified in his mandate. First, the department should audit the different functions of the organization, and it has been agreed that these audits would be conducted on an annual and rotating basis and limited to the first half of the year. Second, in the second half of the year, the department helps prepare for the year-end external audit and completes different filings required by the federal and provincial governments. Although the production department had been audited that year, the production problems did not begin until the second half of the fiscal year. Convinced that the product quality problems could have been avoided, Mr. Folger conveyed his unhappiness to the CAE, who could only say, "that's the way we've been doing the audits and we've