Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 159

During a review of the treasury function, an internal auditor identified a risk that all bank accounts may not be included in the daily reconciliation process. Which of the following responses would be most effective to mitigate this risk?

Answer options

• A. The treasury supervisor establishes a threshold for amounts on bank statements to be reconciled against data in the system.
• B. The treasury analyst performs a daily reconciliation of all bank statements obtained via email against data in the system.
• C. The treasury analyst reviews a daily report automatically generated by the treasury system, which shows bank statements that have not been uploaded into the accounting system.
• D. The treasury supervisor seeks an annual confirmation from the bank regarding the quantity of bank statements processed within a year.

Correct answer: C

Explanation

Option C is the most effective because it directly identifies bank statements that have not been uploaded, ensuring all accounts are included in the reconciliation process. Option A does not guarantee full reconciliation, while B relies on email statements which might be incomplete. Option D provides only annual confirmation and does not address daily reconciliation needs.