An organization recently acquired a subsidiary in a new industry, and management asked the chief audit executive (CAE) to perform a comprehensive audit of the subsidiary prior to recommencing…

Question

Options

• AThe CAE should accept the engagement and ensure that an explanation of the expertise
• BThe CAE should ask management to hire an external expert who is familiar with the industry to
• CThe CAE should accept the engagement and hire an external expert to assist the audit team with
• DThe CAE should recommend postponing the engagement until the internal audit team is able to

• A
  5% (2)
• B
  3% (1)
• C
  80% (32)
• D
  13% (5)

Explanation

According to IIA guidance, if the internal audit team lacks the necessary skills and knowledge to perform an audit, the CAE should consider obtaining external expertise. Accepting the engagement and hiring an external expert allows the internal audit activity to leverage specialized knowledge while fulfilling the audit request. This approach ensures that the audit is conducted effectively and meets the required standards, while also addressing any competency gaps within the internal audit team.

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