While preparing the audit plan for an automobile manufacturing company, the chief audit executive (CAE) noted that the company's engineering department received a high risk ranking. However, the…

Question

Options

• AInclude the engineering department on the audit plan, use the available internal audit resources
• BAdvise management to accept the assessed risk until the internal auditors are able to review the
• CRecruit internal auditors with the required competencies and wait until they are employed before
• DProceed with a review of the engineering department but supplement the internal audit team

• A
  6% (4)
• B
  3% (2)
• C
  11% (7)
• D
  80% (51)

Explanation

Option D is correct because the IIA Standards require the CAE to ensure that audit engagements are completed with sufficient knowledge, skills, and competencies - and when the internal team lacks those skills, the CAE must obtain external expertise through co-sourcing or consulting to fulfill the audit plan without deferring a high-risk area. Option A is wrong because using unqualified staff to audit a high-risk area would produce unreliable results and violates the competency standard. Option B is wrong because advising management to simply "accept" the risk without exploring alternatives abdicates the CAE's responsibility - management accepting risk is a last resort, not a first response. Option C is wrong because waiting until new hires are onboarded leaves a high-risk area unreviewed indefinitely, which is unacceptable given the risk ranking.

Memory tip: Think "supplement, don't skip" - whenever the CAE faces a skill gap, the answer almost always involves bridging that gap (through co-sourcing or specialists) rather than skipping, deferring, or doing it poorly.

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