During a review of a bank's wire transfer system, what should an IS auditor MOST likely examine to address financial risk?

Examining the wire transfer procedures is critical in addressing financial risk because these procedures outline the processes and controls related to wire transfers, which are significant financial transactions. By reviewing these procedures, an IS auditor can assess whether the controls in place effectively mitigate risks associated with fraud, errors, and compliance with regulations.

Wire transfer procedures typically include authorization processes, transaction verifications, and error-handling protocols. A thorough evaluation can reveal any weaknesses or gaps in the procedures that may lead to financial losses. Moreover, understanding the standard operating procedures helps ensure that transactions are processed consistently and accurately, which is vital for safeguarding the bank's financial assets.

While examining privileged access, fraud monitoring controls, and employee background checks are also important in a comprehensive risk assessment, they do not directly address the procedural aspects governing how wire transfers are conducted. Without robust procedures, even the best monitoring tools and access controls may not suffice in preventing financial risks. Hence, focusing on the wire transfer procedures allows the auditor to ensure that there are established, documented practices that protect the financial integrity of these transactions.