Certified Internal Auditor (CIA) Practice Test

What was the issue when the new staff internal auditor undertook an unfamiliar engagement without supervision?

1. A violation due to hiring an unqualified auditor.

2. A violation due to inadequate supervision.

3. The CAE acted appropriately under the Code of Ethics.

4. Standards were followed in this engagement.

The correct answer is: A violation due to inadequate supervision.

The situation highlights the importance of adequate supervision within the audit process, particularly when dealing with engagements that may be outside the comfort zone or expertise of a newly hired staff internal auditor. Supervision ensures that less experienced auditors receive guidance and oversight from more experienced professionals, which is essential for maintaining the quality and integrity of the audit work being performed. In this context, inadequate supervision can lead to several potential issues, including mistakes in judgment, improperly performed audit procedures, and overlooking significant risks or controls that need attention. Without proper oversight, the new auditor may not have the necessary support to navigate challenges or complexities within the engagement, which could ultimately compromise the overall effectiveness and reliability of the audit results. This scenario underscores the best practices in audit processes, where it’s generally accepted that less experienced auditors should not undertake engagements without adequate supervision to ensure compliance with internal standards and to uphold the profession's ethical guidelines. In such situations, it is critical that organizations establish clear supervisory structures to provide support and ensure the development of staff auditors while safeguarding the quality of audit work.