IIA Exam IIA-CRMA Topic 8 Question 74 Discussion

Actual exam question for IIA's IIA-CRMA exam

Question #: 74
Topic #: 8

While auditing an organization's credit approval process, an internal auditor learns that the organization has made a large loan to another auditor's relative. Which course of action should the auditor take?

AProceed with the audit engagement, but do not include the relative's information.

BHave the chief audit executive and management determine whether the auditor should continue with the audit engagement.

CDisclose in the engagement final communication that the relative is a customer.

DImmediately withdraw from the audit engagement.

Show Suggested Answer

Suggested Answer: B

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

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Rachael

4 months ago

It's best for the management to make that decision, considering potential conflicts of interest.

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Starr

5 months ago

So, should we not withdraw from the audit engagement?

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Jolene

5 months ago

I agree with Lyla, they can determine whether the audit engagement should continue.

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Lyla

5 months ago

I believe the best course of action would be to have the chief audit executive and management decide.

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Rachael

5 months ago

But wouldn't that create a conflict of interest?

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Starr

6 months ago

I think we should disclose the relative's information in the final communication.

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Stephen

6 months ago

Having the chief audit executive and management make the decision seems like the best course of action.

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Paulene

6 months ago

I believe that withdrawing immediately could harm the organization's reputation.

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Denna

6 months ago

But wouldn't withdrawing from the audit engagement be the most ethical option?

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Johna

6 months ago

I agree, transparency is important in this situation.

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Cyril

6 months ago

I think the auditor should disclose in the engagement final communication that the relative is a customer.

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Roselle

7 months ago

Ooh, this is a tough one. I mean, on one hand, you don't want to jeopardize the whole audit just because of a relative. But on the other hand, you can't just ignore it. I think the auditor should definitely disclose it, but maybe they can find a way to still do the audit without compromising their integrity.

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Jenelle

7 months ago

You know, I can see the argument for immediately withdrawing from the audit engagement. That would be the safest option to maintain independence and avoid any appearance of bias. But I can also understand the desire to have management weigh in on it first.

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Chandra

7 months ago

Yeah, I'm with you on that. Transparency is key here. The auditor needs to be upfront about the potential conflict of interest. Hiding it would just make things worse in the long run.

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Cyndy

7 months ago

Hmm, I'm not sure. Proceeding with the audit and not including the relative's information doesn't seem right to me. That would be a breach of ethical standards. I think the auditor should disclose the relative's involvement in the final communication.

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Melodie

7 months ago

I agree, this is a tough one. I think the best course of action would be to have the chief audit executive and management determine whether the auditor should continue with the audit engagement. That way, they can assess the potential conflict of interest and make an informed decision.

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Jarod

7 months ago

Wow, this is a tricky situation. The auditor's relative being a customer of the organization being audited definitely raises some ethical concerns. We need to be very careful here to maintain objectivity and independence.

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Laurel

6 months ago

I agree. Transparency is key in situations like this.

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Selene

6 months ago

That's a good point. It's important to be transparent about any potential conflicts of interest.

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Teddy

6 months ago

I think the auditor should disclose in the engagement final communication that the relative is a customer.

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