Suspecting fraud, the chief financial officer (CFO) asked the internal audit activity to investigate a significant increase in travel related expenditures. Work was performed by a qualified internal auditor. Following the completion of the engagement, the chief audit executive (CAE) reported to the CFO that no violations were found and no fraud had occurred. According to the Standards, which of the following principles did the CAE violate?

Question

Quizplus · Accepted Answer

The CAE violated the principle of due professional care by concluding that no fraud had occurred, as it is not possible to prove a negative. The CAE should have reported that no evidence of fraud was found instead.

Suspecting Fraud, the Chief Financial Officer (CFO) Asked the Internal