According to IIA guidance, the focus of a review of controls to prevent fraud should be on the effectiveness rather than the efficiency of the controls. Effectiveness pertains to whether the controls adequately mitigate fraud risks and prevent fraudulent activities, while efficiency focuses on the performance and cost- effectiveness of the controls, which is not the primary concern in preventing fraud. This makes statement A false in the context of IIA guidance.
:
IIA Standards: 1220.A1 - Due Professional Care
IIA Practice Guide: Fraud Prevention and Detection in an Automated World

Outsourcing fraud investigations to a third-party service provider can result in a lack of familiarity with the organization's specific operations, culture, and history. This can be a disadvantage as external investigators may require more time to understand the context and nuances of the organization, potentially affecting the efficiency and effectiveness of the investigation. References: = IIA Standard 1210 - Proficiency and IIA Practice Guide: "Internal Audit and Fraud".

Judgmental sampling, also known as non-statistical sampling, is a technique where the internal auditor uses their professional judgment to select a sample that they believe is most representative of the population. In this scenario, the internal auditors are choosing to review a sample of complaints from the last three months based on their professional judgment that these complaints are reflective of current marketing practices. This method is particularly useful when the auditor has specific knowledge about the population that allows them to make informed selections.
:
Institute of Internal Auditors (IIA) Standards: Performance Standards 2320: Analysis and Evaluation Internal Audit Manual: Sampling Techniques and Methodologies

The statement that the risk management process supports internal audit by evaluating whether critical controls are adequate and effective is true. The risk management process provides a framework for identifying, assessing, and managing risks, and internal audit uses this information to evaluate the adequacy and effectiveness of controls in place to mitigate those risks. This support helps internal audit focus on areas of high risk and ensure that controls are functioning as intended.
:
IIA Standards: 2120 - Risk Management
IIA Practice Guide: Assessing the Adequacy of Risk Management Processes

When an internal auditor conducts a walk-through to evaluate the control design of a process, the techniques most likely to be used are inquiry and observation. These techniques allow the auditor to understand how the process is designed and how controls are implemented and followed in practice.
* IIA Standard 2320 - Analysis and Evaluation:
* This standard requires internal auditors to analyze and evaluate the information gathered during the engagement to ensure that it is sufficient, relevant, and reliable. During a walk-through, inquiry and observation are key techniques for gathering this information.
* Inquiry:
* Inquiry involves asking questions of personnel involved in the process to understand the control design, its purpose, and how it is intended to work. This helps the auditor gain insight into the process and identify any potential gaps or weaknesses in control design.
* Observation:
* Observation allows the auditor to see the process in action. By watching how the process is carried out, the auditor can verify whether the controls are being applied as designed and whether they are effective in practice.
* IIA Practice Advisory 2320-1:
* The advisory supports the use of inquiry and observation as primary techniques for understanding and evaluating the design and operation of controls during a walk-through.
* Option A (Observation and inspection): While useful, inspection is more about examining documents or physical evidence rather than understanding process design.
* Option C (Inspection and reperformance): Reperformance involves independently executing a control, which is more relevant for testing control effectiveness rather than evaluating design.
* Option D (Inquiry and reperformance): Reperformance is not typically used in a walk-through focused on control design evaluation.
Detailed Explanation:Why Not Other Options?Conclusion: Option B is correct because inquiry and observation are the most appropriate techniques for conducting a walk-through to evaluate the design of a control, as they provide direct insight into how the process and controls are intended to work, in line with IIA standards.