An internal auditor has discovered that duplicate payments were made to one vendor Management has recouped the duplicate payments as a corrective action Which of the following describes managements action in this case?
When duplicate payments are identified and corrected, the management’s response typically addresses the immediate impact or effect of the issue.
Types of Action Plans:
Condition-Based: Addresses the condition or the issue itself.
Cause-Based: Focuses on the underlying cause of the issue.
Root Cause-Based: Delves deeper to identify and address the fundamental reason for the issue.
Effect-Based: Focuses on addressing the consequences or the effects of the issue.
Options Analysis:
Option A: A condition-based action plan would involve identifying and rectifying the condition that led to the duplicate payments.
Option B: A cause-based action plan would address the immediate causes of the duplicate payments.
Option C: A root cause-based action plan would investigate and mitigate the fundamental reasons behind the duplicate payments.
Option D: An effect-based action plan addresses the consequences of the duplicate payments, such as recouping the funds, which is what management did in this scenario.
Conclusion:
Management’s action in recouping the duplicate payments is an effect-based action plan as it focuses on addressing the impact of the error.
Internal Audit Standards and Practice Guides .
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