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Question 307 - IIA-CIA-Part2 discussion

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An internal auditor discovered that sales contracts with business clients were not stored in the electronic document management database instead they were scanned and saved in a nonsystematic manner to server folders Which of the following would be an appropriate consequence for the internal auditor to include in the documented observation?

A.
The document management policy requires business client data to be stored in a specific management database
Answers
A.
The document management policy requires business client data to be stored in a specific management database
B.
Sales contracts were stored improperly because the office manager was not trained to use the electronic database and prefers to avoid it
Answers
B.
Sales contracts were stored improperly because the office manager was not trained to use the electronic database and prefers to avoid it
C.
if the organization becomes subject to litigation the agreed pricing terms and conditions of the contracts may be difficult to prove
Answers
C.
if the organization becomes subject to litigation the agreed pricing terms and conditions of the contracts may be difficult to prove
D.
All staff should be appropriately trained and required to follow the organization's established policies and procedures pertaining to document management
Answers
D.
All staff should be appropriately trained and required to follow the organization's established policies and procedures pertaining to document management
Suggested answer: C

Explanation:

The key issue here is the risk associated with non-compliance to document management policies, particularly in terms of legal exposure. If sales contracts are not stored systematically in the electronic document management database, it can lead to difficulties in retrieving these documents, especially in the case of litigation. This can pose significant legal risks because the organization might struggle to prove the agreed pricing terms and conditions, which could potentially result in financial losses or legal penalties. The consequence highlighted in option C directly addresses this critical risk.

Reference:

'Internal Auditing: Assurance & Advisory Services' (The Institute of Internal Auditors)

'Document Management in Internal Auditing: Best Practices' (The Institute of Internal Auditors)

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asked 18/09/2024
Landry Tankam
38 questions
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