In which of the following circumstances would an internal auditor not need to search for other signs of fraud?
A) The organization has an unusually high increase in costs.
B) There are several substantial weaknesses with the internal control structure.
C) Management institutes a policy of paying vendors promptly in order to avoid incurring penalty charges.
D) One of the employees seems to have had a dramatic increase in their standard of living.

Question

Quizplus · Accepted Answer

Management instituting a policy to pay vendors promptly is a legitimate business decision and does not inherently indicate fraud, unlike the other options which could be red flags for fraudulent activity.

In Which of the Following Circumstances Would an Internal Auditor