Certified Internal Auditor (CIA) Part 1: Business Acumen — Question 115

The internal audit activity is responsible for conducting fraud investigations. A potential fraud instance was identified during an audit engagement. The chief audit executive appoints a lead investigator. Which of the following would most likely be the next step?

Answer options

• A. Ask internal auditors to gather all relevant information and evidence.
• B. Identify and interview witnesses first and potential suspects later.
• C. Conduct a fraud risk assessment to identify the most vulnerable areas.
• D. Determine the competencies needed and assess whether team members have a conflict of interest.

Correct answer: D

Explanation

The correct answer is D because determining competencies and assessing conflicts of interest ensures that the investigation is conducted by qualified personnel without biases. Options A, B, and C may be important steps in the investigation process, but they should follow the initial assessment of team capabilities and conflicts.