An internal auditor is reviewing the accounts receivable when she discovers account balances more than three years old. The auditor was previously supervising the area during this time, and she subsequently advises the chief audit executive (CAE) of a potential conflict. Which of the following is the most appropriate course of action for the CAE to take?
A) Replace the auditor with another audit staff member.
B) Continue with the present auditor, as more than one year has passed.
C) Withdraw the audit team and outsource the financial audit of the division.
D) Work with the division's management to resolve the situation.

Question

Quizplus · Accepted Answer

The CAE should replace the auditor with another audit staff member to maintain objectivity and avoid any potential conflict of interest, as the auditor was previously involved in supervising the area under review.

An Internal Auditor Is Reviewing the Accounts Receivable When She