Which of the following engagements would be considered an appropriate consulting service?

Question

Options

• AThe internal audit activity of a commercial bank routinely performs branch audits for compliance
• BThe internal audit activity participates in a cosourcing arrangement with an IT audit firm to test
• CThe internal audit activity facilitates biannual training of the risk management team in risk
• DThe internal audit activity partners with external auditors annually to complete fieldwork required

• A
  12% (6)
• B
  4% (2)
• C
  78% (38)
• D
  6% (3)

Explanation

Option C is correct because facilitating training is a classic example of a consulting engagement - it is advisory in nature, adds value by building the risk team's capabilities, and does not involve the internal audit activity issuing an independent opinion or conclusion. The IIA defines consulting services as advisory activities intended to improve governance, risk, and control, and training/facilitation fits squarely within that definition.

Why the distractors are wrong:

• A - Branch compliance audits are assurance engagements; internal audit is providing an objective assessment against established criteria.
• B - Cosourcing with an IT firm to perform testing is still assurance work; the structural arrangement (cosourcing) doesn't change the nature of the engagement.
• D - Partnering with external auditors to complete required fieldwork is supporting an assurance engagement, not providing consulting advice.

Memory tip: Ask yourself, "Is internal audit giving an opinion/conclusion, or giving advice/knowledge?" - Assurance = opinion, Consulting = advice. Training is pure knowledge transfer with no independent conclusion, so it's consulting every time.

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