Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 236

While planning for an accounts payable audit, an internal auditor performs an entity-level controls analysis. Which of the following statements is true regarding the approach used by the auditor?

Answer options

• A. It enables the auditor to identify the inherent risks to the effective operation of accounts payable process controls.
• B. It enables the auditor to understand the framework of the activities and associated accounts payable subprocesses.
• C. It enables the auditor to understand the accounts payable process and its flow, including key steps and systems.
• D. It enables the auditor to categorize the population of transactions within the accounts payable process.

Correct answer: C

Explanation

The correct answer is C because understanding the accounts payable process and its flow, including key steps and systems, is crucial for the auditor to assess the effectiveness of controls. Options A, B, and D, while relevant, do not encompass the comprehensive understanding of the process flow that is essential for an effective audit.