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Exam IIA-CIA-Part2 topic 5 question 106 discussion

Actual exam question from IIA's IIA-CIA-Part2
Question #: 106
Topic #: 5
[All IIA-CIA-Part2 Questions]

During an audit of the accounts receivable (AR) process, an internal auditor noted that reconciliations are still not performed regularly by the AR staff, a recommendation that was made following a previous audit. Monitoring by the financial reporting function has failed to detect the shortcoming. Both the financial reporting function and AR report to the controller, who is responsible for implementing action plans. Which of the following supports the internal auditor's decision to combine both observations into one reported finding?

  • A. The observation was made during the same audit, and the action plan has a common owner.
  • B. The observation relates to the same control activity within a common process.
  • C. The observation has a common control, and it was noted in a prior audit.
  • D. The observation has a common process, and the action plan for the observation has a common owner.
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Suggested Answer: D 🗳️

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htg
2 years, 10 months ago
AR issue was found during the previous audit. Maybe that's why?
upvoted 2 times
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Tico
3 years, 2 months ago
Why A is wrong? reconciliations by the AR staff and monitoring by the financial reporting functions are different processes so those observations shouldn't be combined. A is more reasonable.
upvoted 1 times
John1237
2 years, 1 month ago
A is false because it is stated that the observation was made during the same audit. Yet the following second observation was made during the recent audit: “Monitoring by the financial reporting function has failed to detect the shortcoming”.
upvoted 1 times
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