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Question 334 - IIA-CIA-Part2 discussion

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An organization recently acquired a subsidiary in a new industry, and management asked the chief audit executive (CAE) to perform a comprehensive audit of the subsidiary prior to recommencing operations The CAE is unsure her team has the necessary skills and knowledge to accept the engagement According to IIAguidance, which of the following responses by the CAE would be most appropriate?

A.
The CAE should accept the engagement and ensure that an explanation of the expertise limitations is included in the final audit report.
Answers
A.
The CAE should accept the engagement and ensure that an explanation of the expertise limitations is included in the final audit report.
B.
The CAE should ask management to hire an external expert who is familiar with the industry to perform an independent audit for management
Answers
B.
The CAE should ask management to hire an external expert who is familiar with the industry to perform an independent audit for management
C.
The CAE should accept the engagement and hire an external expert to assist the audit team with the audit of the subsidiary
Answers
C.
The CAE should accept the engagement and hire an external expert to assist the audit team with the audit of the subsidiary
D.
The CAE should recommend postponing the engagement until the internal audit team is able to develop sufficient knowledge of the new industry
Answers
D.
The CAE should recommend postponing the engagement until the internal audit team is able to develop sufficient knowledge of the new industry
Suggested answer: C

Explanation:

According to IIA guidance, if the internal audit team lacks the necessary skills and knowledge to perform an audit, the CAE should consider obtaining external expertise. Accepting the engagement and hiring an external expert allows the internal audit activity to leverage specialized knowledge while fulfilling the audit request. This approach ensures that the audit is conducted effectively and meets the required standards, while also addressing any competency gaps within the internal audit team.

Institute of Internal Auditors (IIA) Standards: Attribute Standards 1210: Proficiency

IIA Practice Guide: Obtaining External Assistance in the Conduct of Internal Auditing

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asked 18/09/2024
Phillip Doman
34 questions
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