The accounting department asked the chief audit executive (CAE) to perform a review of suspicious she respond to the request?

Question

Options

• ADecline, if it is consulting engagement because she recently worked in the organization s
• BAccept, 11 is an assurance engagement, as she has been out of the department long enough to
• CInform the accounting department mat me engagement can take place m the future once she has
• DAccept, it is a consulting engagement with agreed-upon scope and services to be provided by me

• A
  5% (3)
• B
  14% (9)
• C
  8% (5)
• D
  73% (47)

Explanation

Option D is correct because when the accounting department requests a review and defines the scope and services, this qualifies as a consulting engagement - and unlike assurance engagements, consulting work does not require the same strict independence standards. The CAE can accept because the client (accounting department) is setting the agreed-upon terms, and the CAE's prior involvement in the area is disclosed and manageable under consulting rules.

Why the distractors fail:

• A is wrong because it reaches the right concern (prior involvement) but draws the wrong conclusion - prior involvement is a reason to reclassify to consulting, not decline it outright.
• B is wrong because it misidentifies the engagement type as assurance; assurance engagements would require the CAE to have been out of the department long enough, but this isn't assurance.
• C is wrong because there is no need to wait - the engagement can proceed now under a consulting framework without the independence waiting period.

Memory tip: Think "Consulting = Client Controls Scope." When the requesting party defines what they want done, it's consulting - and consulting sidesteps the strict independence clock that assurance engagements require. If you see "agreed-upon scope" in an answer choice for an IIA exam question involving prior relationships, that's your signal it's consulting and likely acceptable.

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