The chief financial officer of a company reports directly to the chief executive officer. The CFO discovers that the CEO has been directing staff to record fictitious sales. Internal policy has not resolved the matter. Applying the IMA guidance that an issue involving the supervisor should be presented to the next level of management, to whom should the CFO present the issue?

Correct answer: A) The audit committee or board of directors, which oversees the CEO

Explanation

The IMA statement says that if the supervisor appears to be involved, the issue could be presented to the next level of management. When the supervisor is the CEO, the next level is the governing body that oversees the CEO, such as the audit committee or board of directors. Raising it with the CEO is pointless because the CEO is involved, telling the sales staff does not resolve it, and going straight to an outside regulator skips the internal resolution steps.