Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 16

A company's policy requires that all customers be treated in a fair and consistent manner. Which of the following audit procedures would provide the most persuasive evidence that the policy was followed?

Answer options

• A. Compare the aging of outstanding receivables due from each customer.
• B. Compare credit reports with annual sales for a sample of customers.
• C. Compare the ratio of outstanding receivables to the authorized credit limit for each customer.
• D. Compare the sales discounts offered to each customer.

Correct answer: D

Explanation

Option D is correct because it directly evaluates the consistency of discounts offered to customers, which is a clear indicator of fair treatment. Options A, B, and C, while useful for assessing financial performance, do not specifically address the fairness and consistency of customer treatment as outlined in the company's policy.