An internal auditor has suspicions that the management of a department splits me number of planned purchases to avoid the approval process required for larger purchases. Which of the following would…

The correct answer is D. Using data analytics. Data analytics is the most efficient technique to identify patterns and anomalies that may indicate the splitting of planned purchases to avoid the approval process. By applying data analytics, the internal auditor can analyze the entire dataset to detect unusual patterns, such…

Conducting the Internal Audit Engagement

Question

An internal auditor has suspicions that the management of a department splits me number of planned purchases to avoid the approval process required for larger purchases. Which of the following would be the most efficient technique to help the auditor identify the seventy of this malpractice?

Options

AExamining the entire population
BAsking management about the malpractice
CTesting a sample of random transactions.
DUsing data analytics

How the community answered

(33 responses)

A
3% (1)
B
15% (5)
C
9% (3)
D
73% (24)

Explanation

Data analytics is the most efficient technique to identify patterns and anomalies that may indicate the splitting of planned purchases to avoid the approval process. By applying data analytics, the internal auditor can analyze the entire dataset to detect unusual patterns, such as multiple purchases just below the approval threshold made within a short timeframe. This method is more effective than random sampling or manual examination as it can quickly and accurately identify instances of potential malpractice across large volumes of transactions.

Topics

#data analytics#purchase splitting#fraud detection#procurement audit

Community Discussion

No community discussion yet for this question.

Full IIA-CIA-PART2 Practice