Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 107
The final engagement communication contains the following observation:
"The internal auditor discovered that three of the 10 contracts reviewed failed to meet the organization's competitive bidding requirements. Management explained that senior management deemed these purchases to be critical and awarded them as sole-source."
Which of the following components is missing in the documentation of the observation?
Answer options
- A. Criteria.
- B. Effect.
- C. Condition.
- D. Cause.
Correct answer: B
Explanation
The correct answer is B, Effect, because the documentation does not specify the impact or consequences of not meeting the competitive bidding requirements. Options A, C, and D are incorrect because the criteria for bidding, the current condition of the contracts, and the cause of the sole-source decisions are all provided or implied in the observation.