IIA-CIA-Part1 Exam - Question 25

Question

During a payroll audit of a large organization, an auditor noted that the assistant personnel director is responsible for many aspects of the computerized payroll system, including adding new employees in the system; entering direct-deposit information for employees; approving and entering all payroll changes; and providing training for system users. After discussions with the director of personnel, the auditor concluded that the director was not comfortable dealing with information technology issues and felt obliged to support all actions taken by the assistant director. The auditor should:.

Examice · Accepted Answer

The auditor's primary concern should be the detection and prevention of potential fraud due to the lack of proper segregation of duties. The assistant personnel director's control over multiple critical functions within the payroll system could lead to fraudulent activities, especially in the area of direct deposits to employee bank accounts. Therefore, reviewing the engagement program to ensure that testing of direct deposits is adequately covered is a necessary step. This approach allows the auditor to gather sufficient evidence about possible irregularities before considering a fraud investigation.

Mary1982 · Answer

My understanding as to why it is B is because there a red flag (Lack of Segregation of duties - Inappropriate combo of work). Have to perform additional work to ensure there is a possibility of fraud before requesting an investigation.

AzeemIIA · Answer

how come the auditor is okay with the situation of single person doing multiple tasks related to one function.. and what's the logic behind Answer B

Elvoo · Answer

Why is D false? Can someone please explain?

IIA-CIA-Part1 Exam - Question 25

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