Skip to content

CS Professional · Internal and Forensic Audit · Special Points relating to Internal Audit in various Entities

In auditing a government scheme that distributes subsidies to beneficiaries, the internal auditor compares the number of beneficiaries paid with the eligibility database and finds many payments to persons not on the list. What is the most direct audit concern?

The main concern is leakage or ineligible payments caused by weak beneficiary validation controls. Payments made to people not in the eligibility database show that eligibility checks were bypassed or ineffective. Share capital, inventory valuation and listing rules have no bearing on a government subsidy distribution scheme.

  1. APossible leakage or ineligible payments due to weak beneficiary validation controlsCorrect
  2. BOverstatement of share capital
  3. CIncorrect inventory valuation
  4. DBreach of listing regulations

Explanation

Payments to persons absent from the eligibility database indicate that beneficiary validation was weak or bypassed, raising the risk of leakage and ineligible disbursement. The other options concern matters irrelevant to a government subsidy scheme.

Did you get it right without looking?

One question tells you little. A timed set on Special Points relating to Internal Audit in various Entities shows your real accuracy, how long you take and where you lose marks.

Practise Special Points relating to Internal Audit in various EntitiesFree diagnostic mock

More Special Points relating to Internal Audit in various Entities questions