Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 153

An internal audit develops an engagement observation related to an organization’s accumulation of large travel advances. The auditor observes that the organization’s procedures do not require justification for travel agencies greater than a specific amount. Which of the following best describes the organization’s procedures?

Answer options

• A. A criterion of the organization’s accumulation of large travel advances.
• B. A condition of the organization’s accumulation of large travel advances.
• C. A consequence of the organization’s accumulation of large travel advances.
• D. A cause of the organization’s accumulation of large travel advances.

Correct answer: D

Explanation

The correct answer is D because the lack of a requirement for justification acts as a cause for the accumulation of large travel advances. Without such a policy, it is likely that the organization will continue to accumulate these advances without proper oversight. The other options describe different aspects that do not directly address the root issue of insufficient controls leading to the accumulation.