A transformational leader focuses on inspiring and motivating employees to exceed expectations, emphasizing vision, innovation, and long-term goals rather than just rule enforcement or performance monitoring.
* (A) The leader searches for deviations from the rules and standards and intervenes when deviations exist.
* Incorrect: This describes a transactional leader, who focuses on correcting errors and enforcing rules rather than inspiring employees.
* (B) The leader intervenes only when performance standards are not met.
* Incorrect: This describes a passive transactional leader, who waits for issues before taking action.
* (C) The leader intervenes to communicate high expectations. (Correct Answer)
* Transformational leaders set high expectations, inspire employees to achieve them, and foster a culture of continuous improvement.
* IIA Standard 2110 - Governance highlights the importance of leadership in driving organizational performance.
* Transformational leadership aligns with COSO's principles of strong governance and strategic vision.
* (D) The leader does not intervene to promote problem-solving.
* Incorrect: A transformational leader actively promotes problem-solving by encouraging innovation and continuous improvement.
* IIA Standard 2110 - Governance: Recognizes leadership's role in fostering a strong ethical and performance-driven culture.
* COSO ERM - Governance and Culture: Highlights leadership's role in shaping strategic direction.
Analysis of Each Option:IIA References Supporting the Answer:Thus, the correct answer is (C) because a transformational leader inspires employees by setting high expectations and motivating them to achieve organizational goals.