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Question 693 - IIA-CIA-Part1 discussion

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A chief audit executive (CAE) recruited a few new internal auditors to reduce the resource gaps identified in this year's internal audit plan. One of the new recruits has several years of experience with the organization. Ten months ago. she served as a senior supervisor in the finance department. However, for the past 10 months, she has been helping the organization with implementing a new IT system. What approach should the CAE take for the upcoming financial statement controls audit?

A.

Assign the new auditor to assist with conducting the fieldwork. but ensure that her work is reviewed by the CAE.

Answers
A.

Assign the new auditor to assist with conducting the fieldwork. but ensure that her work is reviewed by the CAE.

B.

Assign the new auditor to assist with developing the audit program, but ensure that the audit program is executed by other audit staff.

Answers
B.

Assign the new auditor to assist with developing the audit program, but ensure that the audit program is executed by other audit staff.

C.

Ensure that the new auditor's previous manager, and other close former coworkers, are excused during the audit.

Answers
C.

Ensure that the new auditor's previous manager, and other close former coworkers, are excused during the audit.

D.

Ensure that the new auditor is responsible only for the supervisory review, but not the execution of the audit field work.

Answers
D.

Ensure that the new auditor is responsible only for the supervisory review, but not the execution of the audit field work.

Suggested answer: B

Explanation:

In this scenario, the new recruit has a potential conflict of interest due to her recent role in the finance department. To maintain the objectivity and independence required by the IIA Standards, it is essential to prevent any actual or perceived bias in the audit process. Assigning the new auditor to assist with developing the audit program, but ensuring that the execution of the program is handled by other audit staff (Option B), is the most appropriate approach. This ensures her expertise is utilized without compromising the integrity of the audit. Standard 1130: Impairment to Independence or Objectivity requires auditors to avoid auditing areas where they have recently worked or where personal relationships could impair their objectivity.

Reference:

IIA Standards, Standard 1130: Impairment to Independence or Objectivity

IIA Standards, Standard 1100: Independence and Objectivity

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asked 03/11/2024
Sukhpreet Sidhu
40 questions
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