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Question 5: CIA II Section III

Question 5:

1. Management of a property and casualty insurance company has two major concerns about the efficiency and effectiveness of the claims-processing activities:

  • Some claims are being paid that should not be paid or are being paid in amounts in excess of the policy.
  • Many claims are not being paid on a timely basis.

In preparing for an audit of the area, the internal auditor decides to perform a preliminary survey to gather more information about the nature of processing and potential problems. The auditor uses a questionnaire during interviews to gather this information. Unfortunately, the questionnaire does not cover some of the information offered by the persons being interviewed. Consequently, the auditor does not document the potential problems for further audit investigation. The primary deficiency with this process is that

 

 

 

 

 

 

 

 

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