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IIA Exam IIA-CIA-Part2 Topic 8 Question 96 Discussion

Actual exam question for IIA's IIA-CIA-Part2 exam
Question #: 96
Topic #: 8
[All IIA-CIA-Part2 Questions]

While reviewing the organization's financial year-end processes, an internal auditor discovered an erroneous journal entry. If the error is not addressed, it will result in a material misstatement of the financial records. The internal auditor needs an additional four weeks to complete the audit engagement. How should the auditor communicate this finding?

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Suggested Answer: C

The correct approach aligns with the International Standards for the Professional Practice of Internal Auditing (Standards), particularly Standard 2400: Communicating Results. The auditor must promptly discuss material errors to prevent ongoing misstatements. Immediate correction ensures timely remediation and reduces the risk of material misstatement persisting in the financial records. Additionally, if the error is resolved before the engagement concludes, it may not necessitate inclusion in the final report, as per the guidance on handling material findings (Practice Advisory 2410-1). This approach also demonstrates collaboration and alignment with management, fostering trust.


by Alita at Jan 24, 2025, 01:07 AM

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Jolanda
2 months ago
Oh, man, this is a real head-scratcher. I bet the accounting staff will try to bribe the auditor with donuts if they go with option C. 'Hey, we'll fix it, just don't tell anyone!'
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Dante
1 months ago
Yeah, that way they can correct the error immediately and avoid it being included in the audit report.
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Veronika
1 months ago
I think the auditor should go with option C and discuss the finding with the accounting staff.
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Dulce
2 months ago
Option D is a bit extreme, don't you think? Bypassing management and going straight to the authorities? That's just asking for trouble. I'd stick with the good ol' C approach.
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Stefany
1 months ago
Once the correction is made, there may not be a need to report it in the final audit.
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Gerald
1 months ago
It's important to address the error with the accounting staff first.
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Page
1 months ago
I think option C is the best approach in this situation.
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Mollie
2 months ago
I agree, option D seems too drastic.
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Katina
2 months ago
In that case, the auditor should report directly to regulatory authorities.
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Chara
2 months ago
But what if management tries to cover up the error?
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Olive
2 months ago
I'm torn between B and C. Ultimately, it's a material misstatement, so the auditor should probably include it in the report, but discreetly working with the staff to correct it first is the way to go.
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Katy
1 months ago
In that case, it might not need to be included in the report.
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Xochitl
2 months ago
True, but maybe they can correct it before the audit is concluded.
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Jerry
2 months ago
But if it's a high-risk item, shouldn't it be included in the final report?
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Refugia
2 months ago
I think discussing with the accounting staff first is a good idea.
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Isadora
2 months ago
Agreed, it's important to address the error internally before escalating it.
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Gracia
2 months ago
I think discussing it with the accounting staff first is a good idea.
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Kimberely
3 months ago
I agree with Lachelle, it's important to keep management informed.
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Lachelle
3 months ago
I think the auditor should issue an interim report to management.
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Emerson
3 months ago
Definitely go with option C. It's the most practical solution - work with the accounting staff to fix the issue right away, and no need to include it in the final report if it's resolved. Saves everyone a headache.
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Gerardo
2 months ago
Working with the accounting staff to correct the issue immediately is the most efficient way to handle this.
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Laila
2 months ago
It's important to address the error promptly to avoid any material misstatements in the financial records.
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Valentin
2 months ago
I agree, option C seems like the best course of action in this situation.
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