Entity-level controls provide the foundation for effective process controls. If these controls are poorly designed, they can undermine the effectiveness of process-level controls (COSO Framework, 2013). Internal auditors assess entity-level controls during risk assessments, as emphasized in CIA Part 2 (Section II). Option A is incorrect as auditors prioritize high-risk controls rather than all controls. Options C and D contradict best practices in engagement planning (Standard 2200), which encourage transparency and comprehensive evaluation of key risks.

Comprehensive and Detailed Explanation:
Software development security requires internal auditors to understand change management processes (B)
- how updates, patches, and new code are introduced and controlled to prevent vulnerabilities. While IT general controls (A) are important, they are broader (e.g., access, backup, operations). Fluency in programming languages (D) and proficiency in design software (C) are too technical and unnecessary for audit. Instead, auditors need to understand how changes are authorized, tested, and implemented, ensuring that the development process follows security and governance standards. According to Standard 1210 - Proficiency, internal auditors must have or obtain sufficient knowledge to evaluate relevant risks, making change management competency most critical.

Comprehensive and Detailed Explanation From Exact Extract:
A conservative working capital policy means maintaining higher current assets relative to current liabilities (e.g., higher cash balances, larger inventories). This increases liquidity but reduces profitability because funds are tied up in low-yield assets. Therefore, the expected result is high liquidity (Option C).

The most effective step in helping the auditor determine whether fraud exists after observing a double payment transaction on a supplier invoice is to perform data analytics on the supplier's information, invoiced amounts, and payments performed. Data analytics allows the auditor to systematically analyze large volumes of transactions to identify patterns, anomalies, and potential fraudulent activities. This approach is more comprehensive and effective in uncovering fraud than simply extending the audit scope or switching to a fraud investigation engagement without a thorough initial analysis.
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IIA Standards: 1220.A1 - Due Professional Care
IIA Practice Guide: Auditing for Fraud

According to IIA guidance, if the internal audit team lacks the necessary skills and knowledge to perform an audit, the CAE should consider obtaining external expertise. Accepting the engagement and hiring an external expert allows the internal audit activity to leverage specialized knowledge while fulfilling the audit request.
This approach ensures that the audit is conducted effectively and meets the required standards, while also addressing any competency gaps within the internal audit team.
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Institute of Internal Auditors (IIA) Standards: Attribute Standards 1210: Proficiency IIA Practice Guide: Obtaining External Assistance in the Conduct of Internal Auditing