Certified Internal Auditor (CIA) Part 1: Business Acumen — Question 62

An internal auditor assessed the controls within his organization's payroll process and suspects that erroneous payments may have been made to a fraudulent bank account. What is the best course of action for the auditor to take?

Answer options

• A. Speak to the payroll manager so he may investigate the auditor's observations.
• B. Continue to investigate the payments to confirm the accuracy of the observations, and determine whether further fraudulent payments have been made.
• C. Stop the audit and report the findings to senior management immediately.
• D. Escalate the concern to the engagement supervisor.

Correct answer: B

Explanation

The correct answer is B, as continuing the investigation allows the auditor to confirm their findings and uncover any additional fraudulent activity. Options A and D do not directly address the need for thorough verification, while C is premature since the auditor should first validate their observations before escalating the issue.