Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 101

When a significant finding is noted early during a review of the accounts payable function, which next course of action is best for communicating the issue?

Answer options

• A. Inform accounting management via an interim memorandum update.
• B. Note the item in the workpapers for inclusion in the final audit report.
• C. Call a meeting and discuss the issue with the audit committee.
• D. Alert the CEO as soon as the issue is discovered.

Correct answer: A

Explanation

The correct answer is A because informing accounting management through an interim memorandum allows for prompt communication and immediate action on the finding. Options B and C are less effective as they delay communication, and D may not be appropriate as the CEO may not need to be involved at this stage.