When planning an audit engagement, what should an internal auditor first consider when assessing the risk of fraud in the area to be audited?
When planning an audit engagement, what should an internal auditor first consider when assessing the risk of fraud in the area to be audited?
When planning an audit engagement, an internal auditor should first consider the impact of and exposure to fraud. This is because understanding the potential consequences and likelihood of fraud is crucial in prioritizing the areas that require more attention and in determining the appropriate audit procedures. Additionally, this assessment helps in identifying where controls might be insufficient and where fraud risks are most significant.
why cant the answer be C ?
Understanding the organizational structure is important for identifying potential segregation of duties issues, but it is not the primary focus when first assessing fraud risk.