CIG Auditing & Investigations 3 — Questions and Answers
Question 1: An OIG auditor identifies a significant deficiency in internal controls. Under GAGAS, this finding must be communicated to:
- Only the auditee's management
- Management and those charged with governance in the written report (Correct answer)
- The Department of Justice for immediate action
- Only the head of the audited agency
Correct answer: Management and those charged with governance in the written report
GAGAS requires that significant deficiencies be communicated in writing to management and those charged with governance, such as an agency's audit committee or board.
Question 2: Which standard of evidence is typically required to sustain a finding in an administrative investigation by an OIG?
- Beyond a reasonable doubt
- Preponderance of the evidence (Correct answer)
- Clear and convincing evidence
- Probable cause
Correct answer: Preponderance of the evidence
Administrative investigations typically use the preponderance of the evidence standard (more likely than not), which is lower than the criminal standard of beyond a reasonable doubt.
Question 3: When an OIG auditor discovers potential fraud during a compliance audit, the FIRST required action is to:
- Complete the audit before reporting the fraud
- Immediately notify the appropriate investigative personnel and legal counsel (Correct answer)
- Confront the suspected employee directly
- Issue a fraud alert in the final audit report
Correct answer: Immediately notify the appropriate investigative personnel and legal counsel
GAGAS requires auditors who discover indicators of fraud to promptly communicate this to appropriate investigative personnel and legal counsel rather than continuing the audit as normal.
Question 4: The concept of 'independence in appearance' in auditing means that:
- Auditors must dress professionally during fieldwork
- Auditors must avoid situations that would lead a reasonable person to question their objectivity (Correct answer)
- Auditors must be physically separate from the auditee's offices
- Auditors must not have worked in government for less than two years
Correct answer: Auditors must avoid situations that would lead a reasonable person to question their objectivity
Independence in appearance requires that auditors avoid circumstances that would cause a reasonable person to doubt their objectivity, even if actual independence is maintained.
Question 5: A federal investigator wants to access an employee's government-issued email account during an investigation. Which legal authority most directly supports this access?
- The Privacy Act of 1974
- The government's banner notice and reduced expectation of privacy policy (Correct answer)
- The Electronic Communications Privacy Act waiver
- Fourth Amendment administrative exception
Correct answer: The government's banner notice and reduced expectation of privacy policy
Government employees are notified via banner notices that they have a reduced expectation of privacy on government systems, allowing authorized investigators to access agency email accounts.
Question 6: In a procurement fraud investigation, 'bid rotation' is best described as a scheme where:
- Contractors alternate submitting artificially high losing bids to allow a designated winner to take turns winning contracts (Correct answer)
- Agencies rotate which contractors are eligible to bid each fiscal year
- Contracting officers rotate bid evaluation duties to prevent bias
- Contractors submit bids at rotating time intervals to avoid detection
Correct answer: Contractors alternate submitting artificially high losing bids to allow a designated winner to take turns winning contracts
Bid rotation is a collusive scheme where co-conspirators take turns winning contracts while others submit sham high bids, constituting bid rigging under antitrust law.
Question 7: Which document formally establishes the scope, objectives, and methodology of an OIG audit before fieldwork begins?
- The management letter
- The audit program or audit plan (Correct answer)
- The engagement letter
- The exit conference memorandum
Correct answer: The audit program or audit plan
The audit program (or audit plan) is the formal document that sets out the specific objectives, scope, and step-by-step methodology auditors will follow during fieldwork.
CIG Auditing & Investigations 3
An OIG auditor identifies a significant deficiency in internal controls.
Under GAGAS, this finding must be communicated to: