CIA Part 1 - Q16

16. External assessment of an internal audit activity is not likely to evaluate

a. The tools and techniques employed by the internal audit activity.

b. Detailed cost-benefit analysis of the internal audit activity.

c. Compliance with the Standards for the International Professional Practice of Internal Auditing.

d. Adherence to the internal audit activity’s charter.

16. Solution: b

a. Incorrect. The tools and techniques employed by the IAA would be within the broad scope of coverage of the external assessment.

b. Correct. The external assessment should consist of a broad scope of coverage that includes: 

(1) Conformance with the Definition of Internal Auditing, Standards, The Code of Ethics and the internal audit activity’s charter, plans, policies, procedures, practices, and applicable legislative and regulatory requirements;

(2) the expectations of the IAA expressed by the board, executive management and operational managers; 

(3) the integration of the IAA into the organization’s governance process, including the relationships between and among the key groups involved in the process; 

(4) tools and techniques employed by the IAA; (5) the mix of knowledge, experience, and disciplines within the staff, including staff focus on process improvement; and (6) the determination as to whether or not the IAA adds value and improves the organization’s operations (PA 1312- 1.10). A detailed cost-benefit analysis of the IAA would not be part of the external assessment.

c. Incorrect. Compliance of the Standards for the International Professional Practice of Internal Auditing is within the broad scope of coverage of the external assessment. 

d. Incorrect. Adherence with the IAA’s charter is within the broad scope of coverage of the external assessment.