Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 27

After the team member who specialized in fraud investigations left the internal audit team, the chief audit executive decided to outsource fraud investigations to a third party service provider on an as needed basis. Which of the following is most likely to be a disadvantage of this outsourcing decision?

Answer options

• A. Cost.
• B. Independence.
• C. Familiarity.
• D. Flexibility.

Correct answer: C

Explanation

The correct answer is C, as outsourcing fraud investigations may lead to a lack of familiarity with the organization's specific processes and culture, which can hinder the effectiveness of the investigations. While cost, independence, and flexibility are also important considerations, they do not directly impact the understanding and context needed for effective fraud detection as much as familiarity does.