An internal auditor discovered that sales contracts with business clients were not stored in the electronic document management database instead they were scanned and saved in a nonsystematic manner…

Question

Options

• AThe document management policy requires business client data to be stored in a specific
• BSales contracts were stored improperly because the office manager was not trained to use the
• Cif the organization becomes subject to litigation the agreed pricing terms and conditions of the
• DAll staff should be appropriately trained and required to follow the organization's established

• A
  8% (4)
• B
  6% (3)
• C
  84% (41)
• D
  2% (1)

Explanation

The key issue here is the risk associated with non-compliance to document management policies, particularly in terms of legal exposure. If sales contracts are not stored systematically in the electronic document management database, it can lead to difficulties in retrieving these documents, especially in the case of litigation. This can pose significant legal risks because the organization might struggle to prove the agreed pricing terms and conditions, which could potentially result in financial losses or legal penalties. The consequence highlighted in option C directly addresses this critical risk.

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