Certified Internal Auditor (CIA) Part 1: Business Acumen — Question 27

The chief audit executive (CAE) has been asked to manage the regulatory compliance function for the organization's retail store operations. Store operations are included in the annual audit plan.
Which of the following strategies best fulfills the requirements of the Standards regarding these audits?

Answer options

• A. The scope of store operations audits should exclude compliance.
• B. Store operations audits can be fully executed with appropriate disclosure to the board.
• C. Store operations audits should be performed by an external service provider.
• D. A store operations compliance audit should be performed by a staff internal auditor under the direction of the CAE.

Correct answer: C

Explanation

The correct answer is C because engaging an external service provider ensures an unbiased and expert approach to regulatory compliance audits, which aligns with the Standards. Options A and B are incorrect as they either exclude compliance or undermine the board's role. Option D is not optimal because it may lack the independence required for regulatory compliance audits.