IIA Exam IIA-CIA-Part1 Topic 10 Question 69 Discussion

Actual exam question for IIA's IIA-CIA-Part1 exam

Question #: 69
Topic #: 10

Which of the following circumstances would most likely be considered a potential red flag for fraud by the internal audit activity?

AThe monthly payroll reports are not vetted to ensure terminated employees have been removed from the payroll system.

BThe volume of nonroutine journal entries has steadily increased over time.

CThe database of approved suppliers has not been reviewed in the last year.

DThe recent employee survey indicates that some employees remain unaware of the organization's whistleblower hotline.

Show Suggested Answer

Suggested Answer: B

An increase in nonroutine journal entries is a classic red flag for potential fraud, as such entries may be used to adjust financials inappropriately. IIA guidance identifies unusual patterns in financial transactions as significant indicators of potential fraud risks.

by Kanisha at Jan 27, 2025, 05:33 PM

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