It is important for the chief audit executive to consider the level of competence of the internal audit staff because their competence influences which of the following?

According to the IIA's International Standards for the Professional Practice of Internal Auditing, the chief audit executive (CAE) is responsible for ensuring the internal audit activity is competent. Competence refers to the knowledge, skills, and other abilities required. This collective competence directly determines if the internal audit staff has the necessary proficiency—the ability to apply those competencies—to perform specific engagements. The CAE must assess the staff's competence to determine if they possess the required proficiency for the planned audit work. If a gap exists, the CAE must provide training or obtain competent external resources.

A. The cost-benefit relationship of planned audits is influenced by many factors, including risk and potential impact. While a competent team may be more efficient, proficiency for the engagement is the more direct and primary consideration derived from competence.
C. Management, not the internal audit activity, is responsible for the achievement of the objectives of internal control. Internal audit provides assurance and advice regarding these controls.
D. The quantity of audits performed is primarily determined by the risk-based audit plan and available resources, not solely by the competence level of the staff. Quality and proficiency are prioritized over quantity.

1. The Institute of Internal Auditors (IIA), International Standards for the Professional Practice of Internal Auditing (Standards), 2017.

Standard 1210 – Proficiency: "Internal auditors must possess the knowledge, skills, and other competencies needed to perform their individual responsibilities. The internal audit activity must collectively possess or obtain the knowledge, skills, and other competencies needed to perform its responsibilities."

Interpretation of Standard 1210: "Proficiency is the ability to apply knowledge, skills, and other competencies to perform an engagement or service." This directly links the possession of competencies to the ability (proficiency) to carry out engagements.

2. The Institute of Internal Auditors (IIA), Implementation Guide 1210: Proficiency, 2017.

Section: "Assessing Competency": "The CAE assesses the knowledge, skills, and other competencies of the internal audit staff, at least annually... This assessment helps the CAE in determining the right mix of staff for specific engagements..." This shows that assessing competence is done to ensure the staff has the proficiency for engagements.

3. Pickett, K. H. Spencer. The Internal Auditing Handbook. 3rd ed., John Wiley & Sons, 2010.

Chapter 4, Section 4.4.2 "Competence": "The CAE must ensure that the internal audit team collectively has the right skills and experience to deliver the audit plan... This involves assessing the skills of the team against the requirements of the audit plan to identify any skills gaps." This academic text confirms that competence is assessed against the requirements of engagements (i.e., to ensure proficiency).