Certified Internal Auditor (CIA) Part 1: Business Acumen — Question 157

An internal audit activity uncovered a potential fraud during a recent engagement and will perform an investigative fraud audit. How would the internal audit activity demonstrate that the team has the necessary experience to perform this engagement?

Answer options

• A. The team must consist of internal auditors who have previous fraud auditing experience and possess a certification in fraud examination.
• B. The internal audit activity must outsource the engagement to an independent, qualified consulting firm specializing in fraud investigations.
• C. The team must collectively possess the necessary audit and fraud skills, although not every member of the team would need previous experience conducting an investigation.
• D. The team should include at least one individual in the area of the suspected fraud to provide valuable advice, due to their familiarity with the business processes, although it is not required.

Correct answer: B

Explanation

The correct answer is B, as outsourcing to a qualified consulting firm ensures that the investigation is handled by experts in fraud, thereby demonstrating the necessary experience. While A and C suggest internal capabilities, they do not guarantee the same level of expertise as outsourcing. D, while useful, does not address the overall experience requirement for the team.