During a regularly scheduled IT audit of a major division, the IT auditor discovers a complicated programming algorithm that adds costs to a cost-plus program billing the government. The amount added accounted for 95% of the net income for the division for the most recent year. Upon further investigation, the IT auditor finds that only the marketing manager, the divisional manager, and the programmer know of the algorithm. The company has a separate section to investigate fraud. The auditor communicates with management and the special investigation section. And the investigation is turned over to that group. However, after a month, it becomes apparent that senior management has instructed the group to not make waves and to drop the investigation. The internal audit department should-----

Select one:

a. Report the findings to the external auditor because the external auditor should be aware of any material misstatement of account balances

b. Take no further action. The nature of the fraud has been reported to the proper authorities within the company and the auditor has no power to pursue the investigation further

c. Immediately report the circumstances and the IT auditors findings to the audit committee

d. Immediately report the circumstances and the IT auditors findings to the appropriate governmental regulatory agency.