When an IS auditor suspects the presence of fraud, what should be their first action?

When an IS auditor suspects the presence of fraud, the first action should be to expand activities to determine if an investigation is warranted. This approach allows the auditor to gather more information and evidence regarding the suspected fraud before taking further action. By expanding their activities, the auditor can assess the situation more thoroughly, identifying the nature and extent of the issue. This proactive step is crucial because it helps to verify the auditor's suspicions and supports a more informed decision on how to proceed.

In the context of the audit process, it's essential to remain objective and independent. The initial investigation allows the auditor to collect facts that can inform whether the fraud is significant enough to escalate to management or the audit committee. This careful approach ensures that any subsequent actions are based on substantiated evidence rather than assumptions, which also aids in protecting the integrity of the audit process.

Choosing to notify management, report to the audit committee, or consult with external legal counsel may be appropriate later on, but these actions typically presuppose a level of certainty about fraudulent activity that may not yet exist at the initial suspicion stage. It's critical to first understand the situation more comprehensively before escalating the matter to others.