If an Internal Auditor Discovers a Suspected Illegal Act Involving

question 3

Multiple Choice

If an internal auditor discovers a suspected illegal act involving financial statement presentation at the company she serves,the internal auditor:

• A) Has a duty to inform her supervisor, even if she suspects her supervisor was aware of, and permitted, this act to occur
• B) Has a duty to report this misconduct to the SEC if she serves a client that is a publicly traded company
• C) Has the opportunity to collect a significant reward under the Dodd-Frank Act if the she informs the SEC
• D) Cannot collect a reward, even if the SEC ultimately recovers substantial sums as a direct result of information supplied to it by the internal auditor

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Definitions:

Horizontal Specialization

The division of work in an organization into specialized tasks or roles that are at the same hierarchical level, promoting expertise in specific areas.

Common Forms

Standard or widely recognized types or methods of something, such as communication, art, or documents.

Environmental Complexity

The magnitude of the problems and opportunities in the organization’s environment as evidenced by the degree of richness, interdependence, and uncertainty.

Component Factors

The individual elements or aspects that collectively form a system, process, or outcome, each contributing to its functionality or success.