Which of the following scenarios would cause a chief audll executive (CAE) to immediately discontinue using any statements that would indicate conformance with the Standards in an audit report?

Question

Options

• AThe internal audit activity used a risk-based approach to create the internal audit plan.
• CThe CAE only accepted engagements that the internal audit activity collectively had the
• DThe area under review restricted the internal audit activity's ability to access records, impacting

• A
  8% (3)
• C
  72% (26)
• D
  19% (7)

Explanation

Option C is correct because the IIA Standards (specifically Standard 1210.A1) require the CAE to obtain competent advice or assistance when the internal audit activity lacks the skills needed for an engagement - not simply refuse or avoid those engagements. By only accepting work the team already had competence for, the CAE was silently limiting the scope of the internal audit activity without disclosure, which constitutes nonconformance with the Standards and requires the CAE to immediately stop claiming conformance.

Option A is a distractor because using a risk-based approach to develop the audit plan is required by the Standards (Standard 2010), so this supports - not violates - a conformance claim. Option D is incorrect because a scope restriction imposed by the auditee is an external constraint; the CAE's appropriate response is to communicate the limitation to senior management and the board, not to automatically abandon conformance statements - the disclosure itself satisfies the Standards.

Memory tip: Think "self-imposed silence = nonconformance." A CAE who quietly narrows the audit universe to only comfortable engagements, without disclosing the gap or seeking outside expertise, is hiding a deficiency - that hidden deficiency is what kills the conformance statement. External restrictions (Option D) require transparency, not a retraction of conformance.

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