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Question 201

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?

    Correct Answer: A

    When an organization hires an external audit firm, the chief audit executive (CAE) can rely on the external firm's auditor in charge to supervise the engagement. This is appropriate since the external auditors possess the necessary expertise and are responsible for ensuring the quality and outcomes of their work. The CAE should still maintain overall responsibility for the audit activity and should ensure that the external audit firm meets the required standards. However, direct supervision during the engagement can be delegated to the external firm as they have the qualified expertise.

Discussion
Tico

D also looks correct.

KonradK

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