Which of the following factors is most important for internal auditors to consider when prioritizing fraud risks?

Which of the following factors is most important for internal auditors to consider when prioritizing fraud risks?
A . The organization’s code of conduct.
B . The organization’s competition.
C . The organization’s code of ethics.
D . The organization’s culture

View Answer

Answer: D

Explanation:

When prioritizing fraud risks, the most important factor for internal auditors to consider is the organization’s culture. A culture that does not robustly promote ethical behavior or where management overrides controls can significantly increase the likelihood and impact of fraud. This aligns with risk management principles that consider organizational culture as a key element in the effectiveness of controls to prevent, detect, and respond to fraud.

Reference: The Institute of Internal Auditors (IIA) guidance on assessing and managing fraud risks and organizational culture.