Q: 12
An internal auditor who is carrying out an engagement to review controls related to corporate tax
reporting must possess which of the following competencies?
1.
Proficiency in analyzing key IT risks and controls.
2.
The ability to recognize significant deviations from good business practices.
3.
Knowledge of key indicators of fraud in tax reporting.
4.
The ability to recognize the existence of problems related to tax accounting.
Options
Discussion
Yeah, I'd go with B. Internal auditor needs to spot problems and red flags for fraud in tax reporting, but deep IT risk analysis isn't usually core for tax-focused reviews unless tech is directly in scope. Pretty sure that's why 3 and 4 are enough here. But open to other takes.
A is wrong, B. Deep IT controls (1) aren't must-have for tax reporting unless they specifically mention tech-driven processes. 3 and 4 cover fraud indicators and tax problem recognition, which are core here.
C or B, depends what they mean by “must possess”. If the scope requires just basic knowledge or expert-level skill, it would change things. Is IT risk analysis really essential here or just a bonus?
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