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

During fieldwork at Himalaya Cements Ltd, the internal auditor notes that 40 of 400 sampled dispatch invoices lack gate-pass matching. The auditor wishes to determine the cause before reporting. Which element of a well-developed audit finding is the auditor now establishing?

The auditor is establishing the root cause. The missing gate-pass matching is the condition already found, while the reason it happened, such as a lapse in process or supervision, is the cause that a useful recommendation must address.

  1. ACondition
  2. BCriteria
  3. CRoot causeCorrect
  4. DEffect

Explanation

Condition is what was found (10% lacking matching), criteria is the standard expected, effect is the impact, and cause is why the gap arose. Determining why the mismatch occurred is establishing the root cause, which allows a recommendation that fixes the source.

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