An external assessment was performed as part of the organization's quality assurance and improvement program. Which of the following conclusions confirms that the internal audit activity is in…

Question

Options

• AThe chief audit executive is well qualified and has responsibilities over operational areas that the
• BPeriodic self-assessments are assigned to entry-level internal audit staff to support their
• CAll audit workpapers are reviewed and signed by the engagement supervisor before the audit
• DEmployees who rotate into the internal audit activity from other areas of the organization are

• A
  5% (1)
• B
  11% (2)
• C
  79% (15)
• D
  5% (1)

Explanation

Option C correctly reflects conformance with IIA Standard 2340 (Engagement Supervision), which requires that engagements be properly supervised to ensure quality and that workpapers be reviewed by the engagement supervisor - confirming the review and sign-off process is functioning as required.

Why the distractors are wrong:

• Option A raises a red flag: a CAE with responsibilities over operational areas creates a conflict of interest that impairs independence (violating Standard 1100), which would be a non-conformance finding.
• Option B is problematic because Standard 1311 requires internal assessments to be conducted by individuals with sufficient knowledge of internal audit practices - assigning them to entry-level staff fails this competency requirement.
• Option D (though truncated) likely describes rotational staff who haven't been properly evaluated for objectivity impairments, which would violate Standard 1120 (Individual Objectivity).

Memory tip: Think "SUPERvisor = SUPERvision standard" - whenever you see engagement supervisors signing off on workpapers, that's a direct match to Standard 2340's supervision requirement, which is one of the most straightforward ways to demonstrate Standards conformance during an external assessment.

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