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How should an internal auditor approach preparing a detailed risk assessment during engagement planning?
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The external auditor has identified a number of production process control deficiencies involving several departments. As a result, senior management has asked the internal audit activity to complete internal control training for all related staff. According to IIA guidance, which of the following would be the most appropriate course of action for the chief audit executive to follow?

Question 301 - IIA-CIA-Part2 discussion

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An internal audit team leader is having difficulties completing the planning phase of an assurance engagement because the business unit lacks a system of internal controls. Which of the following is the most appropriate course of action for the internal audit team leader?

A.
Defer the engagement until a system of internal control has been established
Answers
A.
Defer the engagement until a system of internal control has been established
B.
Change the scheduled engagement from assurance to consulting to help correct the shortcomings
Answers
B.
Change the scheduled engagement from assurance to consulting to help correct the shortcomings
C.
Add a consulting component to the already scheduled assurance engagement
Answers
C.
Add a consulting component to the already scheduled assurance engagement
D.
Seek the involvement of the external auditor to assist with improving the internal controls
Answers
D.
Seek the involvement of the external auditor to assist with improving the internal controls
Suggested answer: C

Explanation:

When an internal audit team leader encounters difficulties due to the lack of a system of internal controls, the most appropriate course of action is to add a consulting component to the scheduled assurance engagement. This approach allows the internal audit team to provide advice and recommendations on establishing internal controls while still fulfilling their assurance responsibilities. By integrating consulting activities, the auditors can help the business unit improve its control environment, which can then be assessed in the assurance engagement.

The Institute of Internal Auditors (IIA) Practice Guide: Consulting Engagements

IIA Standard 1130 - Impairment to Independence or Objectivity

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asked 18/09/2024
Samya Sharab
40 questions
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