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CS Professional · Internal and Forensic Audit · Emerging Issues and Challenges

Prakash Steels' internal audit team uses an analytics tool and finds a 98% match between employee bank accounts and vendor bank accounts for a few payees. The tool output alone should be treated as:

The output is an indicator needing follow-up and corroboration. Analytics highlights anomalies like employee-vendor account matches, but only further inquiry and documentary evidence can establish whether it is fraud, error or a legitimate arrangement, and the work must be documented.

  1. AAn indicator requiring follow-up investigation and corroborationCorrect
  2. BConclusive proof of fraud to be reported to police immediately
  3. CIrrelevant since sampling was not used
  4. DEvidence that need not be documented

Explanation

Analytics flags red flags such as employee-vendor links, but there may be innocent explanations such as a reimbursement vendor. The auditor must corroborate through inquiry and documents before concluding. Treating it as proof is premature, and findings must be documented.

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