Certified Internal Auditor (CIA) Part 1: Business Acumen — Question 178

The internal audit activity received an urgent request to provide consulting services on the potential impact of tariffs resulting from changes in the organization's activities. However, there are no experts on taxation available. Which of the following would be the most suitable course of action for the internal audit activity?

Answer options

• A. Decline the engagement, as tariff-related issues require an assurance engagement.
• B. Compare the cost of outsourcing the engagement to the potential benefits.
• C. Undertake the engagement, but include a disclaimer in the audit report regarding the lack of expertise.
• D. Schedule a training on tariffs to ensure competency is gained prior to accepting the engagement.

Correct answer: B

Explanation

The most suitable course of action is to compare the cost of outsourcing the engagement to the potential benefits, as this allows for a cost-effective solution without compromising quality. Declining the engagement outright may not address the organization's needs, while undertaking it with a disclaimer does not resolve the lack of expertise. Training may take too long to implement in an urgent situation.