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?
When determining whether an outsourced audit service provider possesses the necessary knowledge, skills, and competencies to perform an audit engagement, the chief audit executive (CAE) should consider the reputation of the external service provider. The reputation can provide insight into the service provider's track record, experience, and overall capability to deliver quality audit services. Although factors like specific matters expected to be covered in the engagement communications, financial interests, and other ongoing services are important, they do not directly assess the competency of the provider as comprehensively as the provider's reputation does.
answer A seems right. CAE needs to determine specific matters to be audited to see if outsourced activity has the capabilities to audit those areas
Read Option A carefully. It says specific matters in 'engagement communication' which can be taken up by CAE him/herself. Hence, Option D.