Certified Internal Auditor (CIA) Part 1: Business Acumen — Question 5

An internal auditor for a large computer company suspects that returned computer systems are being repackaged as new products and shipped to other customers before the defects have been repaired. Which of the following would be the most persuasive piece of evidence in support of the auditor's suspicions?

Answer options

• A. Credit memos issued after year end for goods shipped before year end.
• B. Evidence of returned goods in the shipping and receiving area.
• C. An unusual number of customer complaints.
• D. The results of a complete physical inventory taken at year end.

Correct answer: C

Explanation

The correct answer is C, as a high volume of customer complaints directly indicates issues with the products being sold, supporting the auditor's suspicions of repackaging defective systems. Options A and D do not specifically relate to the condition of the products being shipped, while B, although relevant, does not provide as strong a direct link to customer dissatisfaction as option C.