Question

Prior to issuing a final communication on a fraud investigation, the internal auditor should submit a proposed draft for review by the?

1) Board
2) Engagement client's management
3) Organization's legal counsel
4) Organization's public relations department

Answer 1

The proposed draft of a fraud investigation report should be reviewed by the organization's legal counsel to ensure all legal aspects are properly addressed.

Step-by-step explanation:

Before finalizing a communication on a fraud investigation, the internal auditor should present a proposed draft for review primarily to the organization's legal counsel. This step is crucial to ensure that all legal considerations are addressed before the findings become public. The legal team can provide expert guidance on the potential legal repercussions and ensure compliance with regulations. Additionally, involving the legal counsel helps protect the organization's interests and supports the integrity of the reporting process.

Though not explicitly mentioned as an option in the question, it may also be prudent to have the draft reviewed by relevant members of management or even the board, depending on the organization's policies and the seriousness of the findings. However, the organization's legal counsel is typically the primary reviewer for such sensitive communication.