Certified Internal Auditor (CIA) Practice Test

Internal auditors are more likely to detect fraud when they:

1. Recognize and question changes that occur within the organization.

2. Interrogate fraud perpetrators to find out why they committed the fraud.

3. Develop internal controls to prevent fraud occurrence.

4. Document computerized operating system programs thoroughly.

The correct answer is: Recognize and question changes that occur within the organization.

Internal auditors are more likely to detect fraud when they recognize and question changes that occur within the organization because such changes can serve as red flags for fraudulent activity. Changes might include alterations in key processes, shifts in employee behavior, or variations in financial reporting patterns. By being vigilant and inquisitive about these changes, internal auditors can identify inconsistencies or anomalies that may indicate suspicious behavior or financial improprieties. This proactive approach allows auditors to investigate further and gather evidence that could lead to the discovery of fraud. Understanding the organization's operations, processes, and environment enables auditors to develop a keen sense of when something deviates from the norm, which is crucial for effective fraud detection. Other options, such as interrogating fraud perpetrators, developing controls, or documenting system programs, are important aspects of managing fraud risk; however, they do not directly enhance the likelihood of detecting fraudulent activity in real time. Recognizing and questioning changes stands out as a critical skill for auditors in identifying potential fraud scenarios.