Certified Internal Auditor (CIA) Part 1: Business Acumen — Question 17

According to IIA guidance, which of the following statements is correct concerning the knowledge, skills, and competencies required to fulfill the responsibilities of the internal audit activity (IAA)?

Answer options

• A. The IAA must collectively possess the knowledge, skills, and competencies needed to perform all engagements.
• B. Each internal auditor in the IAA must possess the competencies required to detect and investigate fraudulent transactions.
• C. The IAA must not decline any engagement based solely on a lack the necessary knowledge, skills, and competencies to perform it.
• D. The competencies of external service providers must be assessed by the chief audit executive before the IAA can use external service providers' work.

Correct answer: D

Explanation

The correct answer is D because it emphasizes the responsibility of the chief audit executive to assess external service providers' competencies before their work is accepted by the IAA. Option A is incorrect as it suggests all knowledge and skills must be collectively possessed, while option B inaccurately implies that every individual auditor must have all competencies for fraud detection. Option C is wrong because it implies that the IAA can accept engagements despite lacking necessary skills, which contradicts the importance of competency.