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CS Professional · Internal and Forensic Audit · Internal Audit: Introduction and Overview

During fieldwork at Anand Pharma Ltd, an internal auditor finds that credit approvals above Rs 5 lakh lack the required second signature in 12 of 40 sampled cases. To support a reportable finding, which combination should the auditor document?

The auditor should document condition, criteria, cause and effect, backed by sufficient evidence. This structure shows what was found, what standard was breached, why it happened and the risk created, making the finding clear and defensible.

  1. AOnly the sample count of 12 exceptions
  2. BCondition, criteria, cause and effect supported by evidenceCorrect
  3. COnly management's verbal explanation
  4. DThe auditor's personal opinion on the credit manager

Explanation

A well-formed audit finding states the condition found, the criteria (policy) breached, the cause, and the effect or risk, backed by evidence. A count alone or verbal views do not make a complete, supportable finding.

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