Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 222

An internal auditor is using computer-assisted audit techniques to examine employee expenses across several divisions of the organization. Which of the following is true in this situation?

Answer options

• A. The data from various sources should remain segregated for easier analysis and discovery of anomalies.
• B. Fraud detection techniques should be performed against full data populations.
• C. A reactive approach is best suited for fraud detection due to the effectiveness of tips and whistleblowing programs.
• D. Random sampling is an effective method of detecting fraudulent transactions.

Correct answer: B

Explanation

The correct answer, B, emphasizes the importance of analyzing the complete dataset to identify fraud effectively, as this provides a comprehensive view of all transactions. Option A suggests keeping data segregated, which can hinder a thorough analysis. Option C advocates for a reactive approach, which is less effective than proactive fraud detection methods. Option D implies that random sampling can detect fraud, but it may overlook significant anomalies present in the entire dataset.