Question

After completing an investigation, internal auditing has concluded that an employee has stolen a significant amount of cash receipts. A draft of the proposed communication on this observation should be submitted for review to __________.
A. Legal counsel.B. The board.C. The chief executive officer of the organization.D. The organization's outside auditors.

Answer 1

Answer:Option A

Explanation:

Auditing is an independent examination of the financial statement of an audit client to express a true and fair view on the statement examined.

Investigation is a much deeper aspect of auditing that wants to examine a particular aspect of in organization for example theft of cash, insurance claim etc.

The Auditor is only to report to the Board of Directors i.e the Engagement Officer.

The internal auditor must be concerned about the possibility of inclusion of a statement for which the accused employee could use to sue the organization. It becomes imperative for a draft of the proposed final communications on fraud should be submitted to legal counsel for review to prevent further liabilities for the organization.