What do you do as an auditor when Management gives you a Management Response for the Audit report to a finding and states that it has now been corrected and you can view the account and it has not been corrected?

Do I input Management's Response and then input an Auditor's Response stating that I have done an validation of their response and found that the account has not been corrected?

Yes. You should tell both sides of the story. Theirs is that they think it's complete and yours that it isn't. Having said that, I would first confirm that the responder and I were in agreement as to what he/she thought had happened and what your follow up revealed.

How about first informing management that on review, it has not yet been corrected?? A call to the right person might alleviate any embarrassment and forestall any animosity toward the audit department. I'm sure that someone just dropped the ball.