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.

Analysis of Each Option:

(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 Reference Supporting the Answer:

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.

Thus, the correct answer is (C) because a transformational leader inspires employees by setting high

expectations and motivating them to achieve organizational goals.