IIA-CIA-PART2 · Question #314
The following is a list of major findings in the executive summary report for an audit of the contract management process - Noncompliance with contract provisions requiring vendors to obtain…
The correct answer is D. The internal controls guiding contract management are not operating effectively. The appropriate conclusion that can be drawn from the findings is that the internal controls guiding contract management are not operating effectively. The listed findings, such as noncompliance with contract provisions, lack of monitoring compliance with contract obligations…
Question
The following is a list of major findings in the executive summary report for an audit of the contract management process
- Noncompliance with contract provisions requiring vendors to obtain insurance policies with
indemnity value of not less than $1 million
- Compliance with contract obligations and deliverables is not monitored
- No contract agreement with five vendors providing core services
Which of the following is an appropriate conclusion that can be drawn from these findings?
Options
- AThese are weaknesses resulting from a lack of a documented contracting policy
- BSubstandard service delivery by vendors may not be detected
- CManagement should expedite actions to rectify the observations identified
- DThe internal controls guiding contract management are not operating effectively
How the community answered
(25 responses)- A12% (3)
- B4% (1)
- C20% (5)
- D64% (16)
Explanation
The appropriate conclusion that can be drawn from the findings is that the internal controls guiding contract management are not operating effectively. The listed findings, such as noncompliance with contract provisions, lack of monitoring compliance with contract obligations and deliverables, and absence of contract agreements with key vendors, indicate significant control deficiencies in the contract management process. These deficiencies suggest that the controls intended to ensure compliance and effective management of contracts are either inadequate or not functioning as intended.
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