IIA-CIA-PART2 · Question #94
During an audit of the accounts receivable (AR) process, an internal auditor noted that reconciliations are still not performed regularly by the AR staff, a recommendation that was made following a…
The correct answer is A. The observation was made during the same audit, and the action plan has a common owner. Combining observations into one reported finding can be appropriate when they were noted during the same audit and the action plan has a common owner. In this case, the failure of both the financial reporting function and the AR staff to perform reconciliations regularly is…
Question
During an audit of the accounts receivable (AR) process, an internal auditor noted that reconciliations are still not performed regularly by the AR staff, a recommendation that was made following a previous audit. Monitoring by the financial reporting function has failed to detect the shortcoming. Both the financial reporting function and AR report to the controller, who is responsible for implementing action plans. Which of the following supports the internal auditor's decision to combine both observations into one reported finding?
Options
- AThe observation was made during the same audit, and the action plan has a common owner.
- BThe observation relates to the same control activity within a common process.
- CThe observation has a common control, and it was noted in a prior audit.
- DThe observation has a common process, and the action plan for the observation has a common
How the community answered
(29 responses)- A62% (18)
- B10% (3)
- C3% (1)
- D24% (7)
Explanation
Combining observations into one reported finding can be appropriate when they were noted during the same audit and the action plan has a common owner. In this case, the failure of both the financial reporting function and the AR staff to perform reconciliations regularly is interconnected and points to a systemic issue under the responsibility of the controller. Addressing these issues together can provide a more comprehensive view of the control deficiencies and facilitate more effective remediation.
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