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Question 154 - IIA-CIA-Part2 discussion

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An internal auditor completed a review of expenses related to the launch of a new project. The auditor sampled 45 transactions approved by a senior project manager and identified 30 with questionable vendor documentation. Which of the following is the most appropriate conclusion for the auditor to include in the audit report?

A.
The organization incurred excessive cost overruns that resulted in significant financial and legal risk to the project.
Answers
A.
The organization incurred excessive cost overruns that resulted in significant financial and legal risk to the project.
B.
The organization experienced a potential conflict of interest
Answers
B.
The organization experienced a potential conflict of interest
C.
The organization had weaknesses in its review process which allowed questionable transactions with some vendors
Answers
C.
The organization had weaknesses in its review process which allowed questionable transactions with some vendors
D.
The organization allowed the project to launch without assurance that all transactions were regularly approved
Answers
D.
The organization allowed the project to launch without assurance that all transactions were regularly approved
Suggested answer: C

Explanation:

The most appropriate conclusion for the auditor to include in the audit report is that the organization had weaknesses in its review process which allowed questionable transactions with some vendors. This conclusion directly addresses the identified issue of questionable vendor documentation and implies that there are control deficiencies in the review process that need to be addressed to prevent such occurrences in the future.

IIA Standards: 2410 - Criteria for Communicating

IIA Practice Guide: Reporting and Monitoring

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asked 18/09/2024
Joe Mon
27 questions
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