An independent auditor asked a client's internal auditor to assist in preparing a standard financial institution confirmation request for a payroll account that had been closed during the year under audit. After the internal auditor prepared the form, the controller signed it and mailed it to the bank. What was the major flaw in this procedure?

Question

Quizplus · Accepted Answer

Choice "B" is correct. The auditor should control the mailing of independent confirmations. Choice "A" is incorrect. It is appropriate for a member of management, such as the controller, to sign the confirmation request. Choice "C" is incorrect. It is acceptable for an internal auditor to provide direct assistance to the external auditor, such as by preparing confirmation forms. Choice "D" is incorrect. Confirmations may be sent to accounts that show a zero balance, to test for understatement errors or to obtain information about loans.

An Independent Auditor Asked a Client's Internal Auditor to Assist