Certified Internal Auditor (CIA) Part 1: Business Acumen — Question 57

If an engagement client's operating standards are vague and thus subject to interpretation, the auditor should:

Answer options

• A. Seek agreement with the client as to the standards to be used to measure operating performance.
• B. Determine best practices in the area and use them as the standard.
• C. Interpret the standards in their strictest sense because standards are otherwise only minimum measures of acceptance.
• D. Omit any comments on standards and the client's performance in relationship to those standards, because such an analysis would be meaningless.

Correct answer: A

Explanation

The correct answer is A because it is essential for the auditor to establish clear standards with the client to ensure accurate assessment of performance. Options B, C, and D are not appropriate as they either rely on subjective interpretations or dismiss the need for meaningful evaluation of the client's operations.