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Question 138 - IIA-CIA-Part2 discussion

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An internal auditor observes a double payment transaction on a supplier invoice during an accounts payable engagement. Which of the following steps would be the most effective in helping the auditor determine whether fraud exists?

A.
Switch the existing assurance engagement into a fraud investigation engagement
Answers
A.
Switch the existing assurance engagement into a fraud investigation engagement
B.
Extend the audit scope and perform additional testing of controls on other related areas
Answers
B.
Extend the audit scope and perform additional testing of controls on other related areas
C.
Review the poor year's transaction volume and amounts paid compared to the poor year's budget
Answers
C.
Review the poor year's transaction volume and amounts paid compared to the poor year's budget
D.
Perform data analytics on the supplier's information, invoiced amounts, and payments performed
Answers
D.
Perform data analytics on the supplier's information, invoiced amounts, and payments performed
Suggested answer: D

Explanation:

The most effective step in helping the auditor determine whether fraud exists after observing a double payment transaction on a supplier invoice is to perform data analytics on the supplier's information, invoiced amounts, and payments performed. Data analytics allows the auditor to systematically analyze large volumes of transactions to identify patterns, anomalies, and potential fraudulent activities. This approach is more comprehensive and effective in uncovering fraud than simply extending the audit scope or switching to a fraud investigation engagement without a thorough initial analysis.

IIA Standards: 1220.A1 - Due Professional Care

IIA Practice Guide: Auditing for Fraud

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asked 18/09/2024
Jose Manuel GONZALEZ BALSEIRO
35 questions
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