Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 152

An audit reveals that a manager’s spouse is receiving paychecks, but is not employed by the organization. According to IIA guidance, which of the following actions should the internal auditor take?

Answer options

• A. Contact the external auditor and provide all relevant documentation.
• B. Report the finding the senior management in a timely manner, following the normal chain of command.
• C. Meet with the local manager to obtain more information on the finding before taking further action.
• D. Bypass the normal chain of command and contact the board directly to report the finding.

Correct answer: B

Explanation

The correct answer is B because it emphasizes the importance of following the established chain of command when reporting findings, which is crucial for maintaining proper governance and accountability. Option A is incorrect as it involves contacting external auditors prematurely, while option C delays necessary reporting. Option D is inappropriate as bypassing the chain of command can lead to misunderstandings and undermine the internal audit process.