Final answer:
The internal auditor should evaluate fraud indicators and decide whether further action is necessary. If there is sufficient evidence, stricter controls over mailroom operations should be instituted. Confronting the clerk should only be done after a thorough investigation. Option C
Step-by-step explanation:
In this case, the internal auditor should exercise due professional care when handling the suspicion of embezzlement by the mailroom clerk. The most appropriate course of action would be to evaluate fraud indicators and decide whether further action is necessary (Option C). This involves gathering evidence, analyzing financial records, and looking for any anomalies or signs of fraud.
If the internal auditor determines that there is sufficient evidence to support the suspicion, they should then proceed with instituting stricter controls over mailroom operations (Option B). This may include implementing policies and procedures to prevent and detect fraudulent activities, such as segregating duties, conducting regular audits, and implementing surveillance measures.
Confronting the clerk with the auditor's suspicions (Option D) should only be done after a thorough investigation and gathering of evidence. Reassigning the clerk to another department (Option A) should not be the initial course of action, as it may tip off the clerk and hinder the investigation. Option C