During an Assurance Engagement, an Internal Auditor Discovered That a Sales

question 129

Multiple Choice

During an assurance engagement, an internal auditor discovered that a sales manager approved numerous sales contracts for values exceeding his authorization limit. The auditor reported the finding to the audit supervisor, noting that the sales manager had additional new contracts under negotiation. According to IIA guidance, which of the following would be the most appropriate next step?

• A) The audit supervisor should include the new contracts in the finding for the final audit report.
• B) The audit supervisor should communicate the finding to the supervisor of the sales manager through an interim report.
• C) The audit supervisor should remind the sales manager of his authority limit for the contracts under negotiation.
• D) The auditor should not reference the new contracts, because they are not yet signed and therefore cannot be included in the final report.

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Definitions:

Misinformation

False or inaccurate information that is spread intentionally or unintentionally, without the intent to deceive.

Vividly Remembered

The act of recalling memories with exceptional clarity and detail, as if experiencing the moment all over again.

Misleading Information

Refers to false or deceptive information that can affect memory, perception, or understanding, often studied in the context of eyewitness testimony and media.

Loftus

Elizabeth Loftus is a cognitive psychologist and expert on human memory, known for her research on the malleability of human memory and the misinformation effect.