Learn the key step to take when conducting a preliminary risk assessment of an accounts payable process to determine the likelihood of employees paying unapproved invoices. Essential knowledge for the IIA-CIA-Part2 certification exam.
Table of Contents
Question
When performing a preliminary process risk assessment, which action should be taken to determine the likelihood of an employee paying unapproved invoices?
A. Discuss the accounts payable process with the organization’s external auditor.
B. Review supporting documentation of paid invoices for evidence of approval to pay.
C. Review benchmarks related to the accounts payable process in similar organizations.
D. Discuss the accounts payable process with the accounts payable manager.
Answer
B. Review supporting documentation of paid invoices for evidence of approval to pay.
Explanation
When performing a preliminary process risk assessment to determine the likelihood of an employee paying unapproved invoices, the most effective action is to review supporting documentation of paid invoices for evidence of approval to pay (Option B).
By directly examining the documentation associated with actual paid invoices, the auditor can assess whether proper approval procedures were followed before making payments. This allows them to gauge the risk of unauthorized payments being made.
Discussing the accounts payable process with the external auditor (Option A) or accounts payable manager (Option D) could provide useful context, but is not as concrete for assessing actual practices and identifying unapproved payments. Benchmarking the process against other organizations (Option C) looks externally rather than examining the organization’s own practices and controls.
Therefore, reviewing invoice documentation for proof of approval is the key step that will yield direct evidence of whether unapproved invoices are likely being paid, enabling the auditor to assess this risk. The other actions may supplement this, but examining source documents is essential for the preliminary risk assessment.
IIA-CIA-Part2 certification exam assessment practice question and answer (Q&A) dump including multiple choice questions (MCQ) and objective type questions, with detail explanation and reference available free, helpful to pass the IIA-CIA-Part2 exam and earn IIA-CIA-Part2 certification.