IIA-CRMA Exam - Topic 8 Question 74 Discussion

Actual exam question for IIA's IIA-CRMA exam

Question #: 74
Topic #: 8

When auditing the award of a major contract, which of the following should an internal auditor suspect as a red flag for a bidding fraud scheme?

1. Subsequent change orders increase requirements for low-bid items.

2. Material contract requirements are different on the actual contract than on the request for bids.

3. A high percentage of employees are charged to indirect accounts.

4. Losing bidders are hired as subcontractors.

A1 only

B2 only

C1 and 3.

D2 and 4.

Show Suggested Answer

Suggested Answer: B

by Rozella at Apr 13, 2024, 10:20 AM

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Lonny

4 months ago

High percentage of employees in indirect accounts can indicate mismanagement.

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Viva

4 months ago

2 and 4 seem like the most obvious red flags here.

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Kris

4 months ago

Wait, are we really saying that change orders are suspicious? Seems normal to me.

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Junita

4 months ago

I think losing bidders as subcontractors is a huge warning sign!

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Lourdes

4 months ago

Definitely a red flag if the contract requirements change after bids are in.

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Arlie

5 months ago

I’m a bit confused about the indirect accounts part; it seems less related to bidding fraud than the others.

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Krissy

5 months ago

I practiced a similar question where losing bidders being hired raised flags, so I’m leaning towards option D.

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Yan

5 months ago

I think option 2 stands out because discrepancies in contract requirements could definitely suggest something shady.

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Blair

5 months ago

I remember discussing how change orders can indicate manipulation, but I'm not sure if it's the only red flag.

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Lenora

5 months ago

I'm a little confused by the wording of the options. I'll need to re-read the question carefully and try to apply my understanding of bidding fraud schemes to determine the best answer.

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Stevie

5 months ago

I feel pretty confident about this one. The key is to look for changes that benefit the winning bidder, like increased requirements for low-bid items or hiring losing bidders as subcontractors.

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Glenn

5 months ago

Okay, I think I've got a strategy for this. I'll focus on looking for any discrepancies between the bid requirements and the actual contract terms, as well as signs of collusion or favoritism.

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Precious

5 months ago

Hmm, I'm a bit unsure about this one. I'll need to review the key details in the question and try to identify the most likely indicators of fraud.

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Carman

5 months ago

This seems like a tricky question. I'll need to carefully consider each option and think through the potential red flags for a bidding fraud scheme.

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This seems like a straightforward question about the Affirmative Action Plan. I'll need to carefully review the options and think about the key responsibilities of the individual in charge of implementing the plan.

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Lorita

6 months ago

Hmm, I'm a bit unsure about this one. I'm not familiar with QnA Maker, so I'll need to think through the options carefully. Maybe I'll start with A and C, and see if I can find more info on B.

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Meghann

6 months ago

I think Zookeeper is more for coordination, but I'm not confident about it fitting into the job chaining and decision-making scenario here. Oozie sounds more appropriate, right?

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Justa

6 months ago

The key is balanced reporting. Option D about conveying ALL witness information sounds too broad - that could include irrelevant or contradictory statements.

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Josphine

10 months ago

Hey, I bet the auditor's got a sixth sense for this kind of thing. They're probably trained to sniff out the slightest whiff of shady business. Gotta keep your game face on, folks!

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Romana

9 months ago

User 3: I agree, it's important to pay attention to those details.

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Tracey

9 months ago

User 2: Yeah, that does seem like a red flag for bidding fraud.

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Rosita

9 months ago

User 1: I think the auditor would definitely be suspicious if subsequent change orders increase requirements for low-bid items.

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Silva

11 months ago

Wow, these guys are really playing a game of 'spot the fraud' here, aren't they? Gotta keep your wits about you in the world of government contracts, that's for sure!

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Elinore

10 months ago

Absolutely, it's important to pay attention to any red flags that may indicate bidding fraud.

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Catrice

10 months ago

Definitely, you have to be vigilant for any signs of potential fraud.

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Matt

10 months ago

Yeah, it's like a constant game of cat and mouse with these contracts.

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Tresa

11 months ago

Ooh, the fourth option is a good one. Hiring the losing bidders as subcontractors? That's definitely suspicious. Trying to divide the spoils, are we?

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Tamie

9 months ago

It's definitely a sneaky move to watch out for during the audit.

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Jerry

9 months ago

Definitely a red flag for potential bidding fraud.

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Pansy

10 months ago

I agree. It's like hushing them up by giving them a piece of the pie.

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Billy

10 months ago

That does seem fishy. It could be a way to keep them quiet about any irregularities.

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Izetta

11 months ago

Whoa, a high percentage of indirect costs? That's a weird one. Maybe they're trying to hide something in the accounting? Sneaky, sneaky.

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Ressie

10 months ago

Yeah, it could be a way to hide extra expenses or funnel money in a fraudulent way.

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Nan

10 months ago

That does sound suspicious. Maybe they're trying to inflate costs to cover up something.

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Dewitt

11 months ago

Hmm, the second option is also a good one. If the contract requirements don't match the bid documents, that's a major red flag. Someone's trying to pull a fast one.

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Mammie

11 months ago

Definitely. It's important to watch out for any suspicious activities during contract awards.

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Brandon

11 months ago

I agree with you, Brandon. That seems like a clear conflict of interest.

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Mammie

11 months ago

I think the red flag for bidding fraud could be losing bidders being hired as subcontractors.

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Sarah

11 months ago

Ah, I see what they're getting at. The first option seems like a pretty obvious red flag for a bidding fraud scheme. Sneaky contractors trying to inflate their profits, eh?

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