Certified Internal Auditor (CIA) Part 1: Business Acumen — Question 181

An organization's human resources (HR) department allows employees to take their leave time prior to it being earned. The employees track their leave time in a spreadsheet, which they provide to HR. Which of the following controls implemented by HR would best mitigate the risk of employees fraudulently taking leave they have not earned?

Answer options

• A. Periodically review the spreadsheet data and reconcile leave taken and accrued with the organization's timekeeping system.
• B. Annually require ethics training for all employees that includes information on proper reporting of time attendance and leave.
• C. Frequently publish links to the organization's fraud reporting hotline.
• D. Randomly select employees and require them to attest to the accuracy of the leave time they report in their spreadsheets.

Correct answer: A

Explanation

Option A is the best control as it involves verifying the leave taken against the organization's official records, which directly helps to identify any discrepancies or fraudulent claims. Option B, while promoting ethics, does not directly prevent unearned leave. Option C encourages reporting but does not address the tracking of leave itself. Option D relies on employee honesty and does not systematically verify the accuracy of reported leave.