Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 289

An organization is expanding into a new line of business, selling natural gas. The internal auditor is planning an engagement and wants to obtain a general understanding of the natural gas market, the market share that the organization wants to win, and the competitive advantage that the organization may have. Which of the following would be the best source of such information?

Answer options

• A. Interview responsible managers and read strategic documents.
• B. Conduct internet searches on gas sales and analyze market players.
• C. Review gas clients' portfolio and compile statistics on sales margins.
• D. Analyze the organization's revenues and calculate the proportion of gas.

Correct answer: A

Explanation

Option A is the best choice because direct interviews with responsible managers and the review of strategic documents provide comprehensive and specific insights into the organization's objectives and competitive advantages. Option B, while useful, may lack the depth and internal perspective needed for strategic planning. Options C and D focus on analysis of past performance rather than gaining a forward-looking understanding of the market.