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Question 259 - IIA-CIA-Part2 discussion

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An internal auditor examined a nostatistical sample of open accounts receivable balances and discovered that 10 out of 60 exceeded the approved unseated credit limit threshold defined by the organization's policy What should the auditor document in the workpapers?

A.
Credit limit over drafts are not monitored in accordance with the organizations policy
Answers
A.
Credit limit over drafts are not monitored in accordance with the organizations policy
B.
Seventeen percent of customers' open balances in the sample exceed their approved unsecured credit rent
Answers
B.
Seventeen percent of customers' open balances in the sample exceed their approved unsecured credit rent
C.
The threshold for credit limits defined by the organization's policy is not adequate
Answers
C.
The threshold for credit limits defined by the organization's policy is not adequate
D.
Management should perform monthly monitoring of open customer balances
Answers
D.
Management should perform monthly monitoring of open customer balances
Suggested answer: B

Explanation:

When documenting findings from a nonstatistical sample, internal auditors should record the factual observations and quantify the results where possible. In this case, the auditor should document that 17% of the sampled accounts receivable balances exceeded the approved unsecured credit limit. This provides a clear, quantifiable basis for the finding, which is critical for accurate reporting and for management to understand the scope of the issue. Documenting this percentage also supports the auditor's conclusions and recommendations for corrective actions.

The Institute of Internal Auditors (IIA) Practice Guide: Audit Sampling.

IIA Standard 2310 - Identifying Information

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asked 18/09/2024
Harri Jaakkonen
46 questions
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