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:

Quasi-Experiment

An empirical study used to estimate the causal impact of an intervention, lacking the full random assignment of participants to conditions or orders.

Debriefed

The process of providing a detailed explanation or information to participants after an experiment or significant event has concluded.

Confounding

Occurs when the effects of two variables cannot be separated.

Tuskegee Study

A deceitful and unethical study conducted by the U.S. Public Health Service from 1932 to 1972, which aimed to observe the natural progression of untreated syphilis in African American men in Alabama.