IIA-CIA-PART2 · Question #255
An internal auditor is planning an engagement at a financial institution. Toe engagement objective is to identify whether loans were granted in accordance with the organization's policies. When of…
The correct answer is B. Randomly select 30 cases of loans and validate them against applicable underwriting guidelines. To determine if loans were granted in accordance with the organization's policies, the most effective approach is to validate a sample of loans against the applicable underwriting guidelines. This method allows the auditor to directly assess compliance with the specific…
Question
An internal auditor is planning an engagement at a financial institution. Toe engagement objective is to identify whether loans were granted in accordance with the organization's policies. When of the following approaches would provide the auditor with the best information?
Options
- ARandomly select 30 cases of loans and verify whether they were repaid timely and in full
- BRandomly select 30 cases of loans and validate them against applicable underwriting guidelines
- CRandomly select 30 employees to complete a survey regarding whether policies and standards are
- DRandomly select several months obtain ageing reports for these months and compare them with
How the community answered
(34 responses)- A15% (5)
- B71% (24)
- C12% (4)
- D3% (1)
Explanation
To determine if loans were granted in accordance with the organization's policies, the most effective approach is to validate a sample of loans against the applicable underwriting guidelines. This method allows the auditor to directly assess compliance with the specific criteria set out in the organization's loan granting policies, providing clear evidence on whether the loans meet the required standards.
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