Certified Internal Auditor (CIA) Part 2: Practice of Internal Auditing — Question 8

Due to the expanded role of internal audit in the organization, the chief audit executive (CAE) of a construction company decides to employ the services of an outsourced audit service provider to augment the internal audit staff. What does the CAE need to consider in determining whether the outsourced audit service provider possesses the necessary knowledge, skills and other competencies to perform an audit engagement?

Answer options

• A. Specific matters expected to be covered in the engagement communications.
• B. The financial interest that the external service provider may have in the organization.
• C. The extent of other ongoing services the external service provider may be performing for the organization.
• D. The reputation of the external service provider.

Correct answer: D

Explanation

The correct answer is D because the reputation of the external service provider is crucial in assessing their credibility and ability to perform the audit competently. Options A, B, and C, while important factors, do not directly address the knowledge, skills, and competencies required for a successful audit engagement.