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Question 718 - IIA-CIA-Part1 discussion

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During an audit of the procurement department, the internal auditor interviewed the department manager to ask questions about the purchasing process. There have been a number of employee complaints, tips, and reports regarding the purchasing process via the organization's whistleblower hotline. Which of the following phrases from the interviewee is most likely to raise concerns regarding potential control deficiencies or fraud risks?

A.

'The process works the way it is mandated to work.'

Answers
A.

'The process works the way it is mandated to work.'

B.

'I never did it this way.'

Answers
B.

'I never did it this way.'

C.

'I cannot take more than a few days of vacation, as nobody else can perform my duties.'

Answers
C.

'I cannot take more than a few days of vacation, as nobody else can perform my duties.'

D.

'There are policies or procedures for this process.'

Answers
D.

'There are policies or procedures for this process.'

Suggested answer: C

Explanation:

This phrase from the interviewee is most likely to raise concerns regarding potential control deficiencies or fraud risks, because it indicates a lack of segregation of duties and proper backup arrangements in the purchasing process2.Segregation of duties is a key internal control that prevents or detects errors or fraud by ensuring that no single person has complete control over a transaction or activity3.Proper backup arrangements are also important to ensure that the purchasing process can continue smoothly and effectively in the absence of the department manager4.If the department manager cannot take more than a few days of vacation, it may suggest that he or she is trying to conceal some irregularities or misconduct in the purchasing process, or that there is no adequate supervision or review of his or her work5.

1: Internal Audit Interview Questions & Answers - Wisdom Jobs2: Segregation of Duties: A Key Internal Control - The CPA Journal3: Segregation of Duties - The Institute of Internal Auditors or The IIA4: Backup Arrangements - The Institute of Internal Auditors or The IIA5: Fraud Prevention Checklist - The Institute of Internal Auditors or The IIA

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asked 03/11/2024
Dominic Lugg
44 questions
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