Exam IIA-CIA-Part2 Topic 7 Question 350 Discussion

Actual exam question for IIA's IIA-CIA-Part2 exam
Question #: 350
Topic #: 7
At a construction company, an internal auditor is planning an audit of the company's process for designing and building grid connections The process involves customers making payments m three parts
* The first payment of 10% after approval of the customer s application
* The second payment of 70% prior to construction
* The third payment of 20% after construction is complete
Which of the following key controls should the auditor test to ensure that the company is not taking any unwanted credit risks?

Suggested Answer: B Vote an answer

To ensure that the company is not taking any unwanted credit risks, the internal auditor should test controls that ensure construction orders are initiated only after the second invoice, which represents 70% of the payment, is paid. This control is critical because it minimizes the financial risk to the company by ensuring that a significant portion of the payment is received before the majority of the work is undertaken. This practice helps protect the company from potential non-payment issues and reduces the financial exposure associated with the project.
COSO Framework
The Institute of Internal Auditors (IIA) Standard 2130: Control

by Maria at Jul 20, 2026, 07:18 AM

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