An internal auditor is planning an engagement at a financial institution.

To determine if loans were granted in accordance with the organization ' s policies, the most effective approach is to validate a sample of loans against the applicable underwriting guidelines. This method allows the auditor to directly assess compliance with the specific criteria set out in the organization ' s loan granting policies, providing clear evidence on whether the loans meet the required standards.

The Institute of Internal Auditors (IIA) Practice Guide: Auditing Credit Risk Management

IIA Standard 2210 - Engagement Objectives