According to IIA guidance, which of the following actions best demonstrates due professional care by an internal auditor when she discovers a number of fraud-related red flags during an audit engagement?
A.
Conclude the engagement and inform management that fraud has occurred
B.
Perform further testing to verify the existence of fraud.
C.
Suspend the engagement and undertake a formal fraud investigation.
D.
Notify the board of the possible fraud immediately
When an internal auditor discovers fraud-related red flags during an audit engagement, the action that best demonstrates due professional care is to perform further testing to verify the existence of fraud. This approach ensures that any findings of fraud are based on thorough investigation and sufficient evidence, rather than premature conclusions. This procedure aligns with the IIA ' s guidance on due diligence and the thorough investigation of anomalies.
IIA International Standards for the Professional Practice of Internal Auditing.
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