In internal auditing, it is crucial to have the necessary skills and expertise to effectively evaluate and assess the area under review. When internal auditors lack the required skills, the chief audit executive (CAE) must take steps to ensure the engagement is performed effectively. Option D suggests bringing in a consultant who is independent of the area under review and has the missing expertise. This approach ensures that the engagement is conducted with the necessary knowledge and objectivity, thus maintaining the quality and integrity of the audit process. Unlike options A and B, which compromise the audit ' s effectiveness, and option C, which could create conflicts of interest, option D provides an optimal solution.
The IIA ' s International Standards for the Professional Practice of Internal Auditing, Standard 1210 - Proficiency and Standard 1220 - Due Professional Care.

According to the CIA Exam syllabus, internal auditors must design and perform procedures that provide sufficient, reliable, relevant, and useful information (Standard 2310). Simply visually confirming equipment on-site does not confirm ownership; it only establishes physical existence. Ownership requires review of purchase invoices, titles, or registration documents.
The other procedures listed (vouching checks, reconciling invoices with shipping documents, and recalculating allowances) are appropriate and provide reliable audit evidence. Option A would therefore be questioned, as it does not sufficiently address the stated audit objective of ownership verification.

Per Standard 2330 - Documenting Information, workpapers must be sufficient, reliable, relevant, and useful.
Irrelevant workpapers that do not support engagement objectives should not be retained, as they clutter documentation and weaken audit quality. The supervisor should ensure that only workpapers directly tied to objectives are included, which makes Option A correct.

Internal audit activities include evaluating the effectiveness and efficiency of internal controls, and part of this process involves analyzing and advising on the cost-benefit relationship of control activities.
This function helps ensure that the internal controls in place are not only effective in mitigating risks but are also economically justified

When conducting a review of an electronic data interchange (EDI) application provided by a third-party service, it is essential to determine whether an independent review of the service provider's operation has been conducted and to verify that the service provider's contracts include necessary clauses. These steps ensure that the service provider operates securely and meets the organization's requirements for data protection and service reliability.
IIA References:
* IIA Standard 2100: Nature of Work indicates that internal audit should evaluate the adequacy and effectiveness of controls, including those at third-party service providers. Verifying that an independent review has been conducted and ensuring that contracts contain the necessary clauses are critical steps in assessing these controls.
* The Practice Guide on Third-Party Risk Management advises internal auditors to review the service provider's contractual agreements and independent audit reports to assess the adequacy of controls and compliance with standards.