Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 45

An organization has acquired a new line of business. None of the organization's internal auditors have the required expertise to perform an internal audit of the new business line; therefore, the chief audit executive (CAE) has contracted the services of an external audit firm to perform the engagement. The CAE has assigned a member of the internal audit team to assist the external team with the engagement. According to the Standards, which of the following statements is true regarding supervision of the engagement?

Answer options

• A. The CAE may rely upon the external firm's auditor in charge to supervise the engagement.
• B. The external firm's auditor in charge must defer to the judgment of the CAE for any disputes.
• C. The CAE is not responsible for the quality of an audit performed by an external firm.
• D. The CAE should not assign an inexperienced staff member to assist with the engagement.

Correct answer: B

Explanation

The correct answer is B because the external firm's auditor in charge must respect the CAE's authority, especially when disputes arise. Option A is incorrect as it suggests the CAE can fully rely on the external auditor's supervision without oversight. Option C is false because the CAE retains responsibility for the overall quality of audits. Option D is misleading as it doesn't address the CAE's responsibility for ensuring competent assistance.