After the team member who specialized in fraud investigations left the internal audit team, the chief audit executive decided to outsource fraud investigations to a third party service provider on an as needed basis. Which of the following is most likely to be a disadvantage of this outsourcing decision?
Outsourcing fraud investigations to a third party service provider is most likely to result in higher costs. External providers often charge premium rates for their specialized services, which can be more expensive than having an in-house specialist. Additionally, while familiarity with the internal workings of the organization is beneficial, the primary disadvantage in this scenario is the financial impact due to the costs associated with occasional but potentially high fees from third party services.
Internal auditor has the advantage of knowing people within the organization and policy, procedures, etc.
Familiarity?
I believe familiarity here is in the concept of the expertise and experience from the team member who specialized in fraud investigations.