Question

The chief audit executive is reviewing the working papers produced by an internal auditor during a fraud investigation. Among the items contained in the working papers is a description of an item of physical information. Which of the following is the most probable source of this item of information?

1) Observing conditions
2) Interviewing people
3) Examining records
4) Computing variances

Answer 1

Observing conditions is the most probable source of the item of physical information in the working papers during a fraud investigation.

Step-by-step explanation:

The most probable source of the item of physical information contained in the working papers during a fraud investigation is observing conditions.

When conducting a fraud investigation, it is important for the internal auditor to observe the physical conditions or elements related to the fraud. This can include observing the physical state of assets, the condition of documents or records, or any other physical evidence that may provide insights into the fraud.

By observing conditions, the internal auditor can gather firsthand information that can be documented and analyzed as part of the investigation process.