Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 131

As part of the preliminary survey, an internal auditor sent an internal control questionnaire to the accounts payable function. Based on the questionnaire responses, the auditor determines that there is no established procedure for adding and approving new vendors. What would the auditor do next?

Answer options

• A. Determine that this situation is acceptable and focus on more significant issues.
• B. Document the issue in the draft audit report.
• C. Document the observation for further follow up when testing the operating effectiveness of controls.
• D. Interview the personnel associated with this observation.

Correct answer: C

Explanation

The correct answer is C because documenting the observation for follow-up during the testing of controls ensures that the issue is addressed in more detail later. Option A is incorrect as it dismisses a significant finding, while B suggests prematurely documenting the issue without further analysis. Option D, while potentially useful, does not provide a systematic approach to addressing the lack of procedures.