Exam IIA-CIA-Part2 topic 4 question 81 discussion

Actual exam question from IIA's IIA-CIA-Part2

Question #: 81
Topic #: 4

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?

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.

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Suggested Answer: B 🗳️

by Tico at Feb. 13, 2021, 5:56 a.m.

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Kozy

2 weeks ago

Selected Answer: A

According to IIA Standard 2070 – External Service Provider and Organizational Responsibility for Internal Auditing and related guidance: When the internal audit activity uses external service providers to perform engagements (especially where internal staff lack expertise), the CAE remains responsible for ensuring the engagement is performed in conformance with the Standards. However, day-to-day supervision of the external team during the engagement can be delegated to the external firm’s audit lead, provided the CAE retains overall responsibility.

upvoted 1 times

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Tico

1 year, 5 months ago

D also looks correct.

upvoted 1 times

KonradK

1 year ago

D is incorrect because inexperienced auditor can be assigned only if other auditors have suitable knowledge and supervision is maintained along entire engagement

upvoted 3 times

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