During an assurance engagement of an organization's procurement process, an internal auditor obtained the policy that specified the authorized dollar limits for invoices. This document would best support which of the following attributes of an audit report?
Correct Answer: C
Comprehensive and Detailed Step-by-Step Explanation:
* Reference to Audit Report Elements:
* Criteria: The benchmark or standard used for comparison during the audit (e.g., policies, regulations, contracts).
* Condition: The factual observation or evidence identified during the audit.
* Effect: The impact or consequence of the condition on the organization.
* Reasoning:
* Option C is correct because the procurement policy specifies authorized limits, serving as the standard (criteria) against which compliance is assessed.
* Option B (condition) refers to the actual state of observed controls, processes, or compliance, not the benchmark.
* Option A (effect) describes the potential or realized impact of non-compliance but not the standard itself.
* Importance of Criteria:
* Criteria provide a clear benchmark, ensuring that findings are communicated with context and actionable insights.
