Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 261

An internal audit activity is performing an assurance engagement of a shipping organization's billing process. During the early stages of the engagement, the internal audit activity identifies potential high-risk deficiencies in billing transactions with certain vendors. The internal audit activity believes these deficiencies should be communicated to senior management. Which of the following would the internal audit activity include in its preliminary communication to senior management?

Answer options

• A. An action plan for senior management to immediately implement to address deficiencies.
• B. Convers of fraud associated with the questionable billings.
• C. A list of the identified billing transactions with deficiencies and the associated vendors.
• D. Notification of the completion of fieldwork and the preparation of the final report.

Correct answer: C

Explanation

The correct answer is C because providing a list of identified billing transactions with deficiencies and their associated vendors is essential for senior management to understand the scope of the issues. Option A is incorrect as it suggests immediate action without a thorough analysis, while B is not relevant unless fraud is confirmed, and D only informs about the engagement's status without addressing the identified risks.