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Question 238 - IIA-CIA-Part2 discussion

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An internal auditor has suspicions that the management of a department splits me number of planned purchases to avoid the approval process required for larger purchases. Which of the following would be the most efficient technique to help the auditor identify the seventy of this malpractice?

A.
Examining the entire population
Answers
A.
Examining the entire population
B.
Asking management about the malpractice
Answers
B.
Asking management about the malpractice
C.
Testing a sample of random transactions.
Answers
C.
Testing a sample of random transactions.
D.
Using data analytics
Answers
D.
Using data analytics
Suggested answer: D

Explanation:

Data analytics is the most efficient technique to identify patterns and anomalies that may indicate the splitting of planned purchases to avoid the approval process. By applying data analytics, the internal auditor can analyze the entire dataset to detect unusual patterns, such as multiple purchases just below the approval threshold made within a short timeframe. This method is more effective than random sampling or manual examination as it can quickly and accurately identify instances of potential malpractice across large volumes of transactions.

Reference:

The Institute of Internal Auditors (IIA) - Practice Guide: Data Analytics

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asked 18/09/2024
JR Gee
31 questions
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