During an internal audit, an organization's processing department is found to have incidences of both duplicate invoices and notices from customers that purchased goods were not received. The department under review insists that some of these reports are false and that others were isolated oversights due to understaffing.
Which of the following tests would best help the internal auditor detect fraudulent activity?
Searching for gaps in check numbers could help detect fraudulent activity. Gaps in check numbers often indicate that checks have been issued fraudulently or are missing. By identifying these gaps, an auditor can further investigate to determine if fraudulent payments were made, which aligns with the incidence of duplicate invoices and undelivered goods discovered during the audit.
if there are shortage in stock , staff might print fake invoices to cover the shortage, so customers during reconciliation telling they didn't receive the materials, immediately make stock count to see where is the materials, and investigate it
why is the answer A?
The internal auditor already knows that there are duplicate invoices. He/she will cancel them and look at the actual inventory flows (customer orders, raw material purchases, finished goods sales, etc.). Gaps in inventory levels would best help the internal auditor detect fraudulent activity