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

Question breakdown

Tests

Link staff competence to engagement proficiency

Difficulty

Easy

Key idea: Staff competence determines whether the internal audit activity has the proficiency needed to perform its engagements properly.

How to reach the answer

1. The question ties staff competence to a consequence the CAE must manage.
2. The proficiency standard requires auditors to possess the knowledge, skills, and competencies needed to perform their responsibilities.
3. Competence therefore directly drives the proficiency available for engagements.
4. Cost, internal control objectives, and audit volume are at most indirectly affected.

Each option

• AIncorrect. Cost-benefit depends on many factors, such as risk and scope, and is not the primary reason competence matters.
• BCorrect. Competence is what provides the proficiency needed to carry out engagements, which is the focus of the proficiency standard.
• CIncorrect. Achieving internal control objectives is management's responsibility and does not depend on auditor competence.
• DIncorrect. Quantity of audits relates to resources and planning, while competence concerns the quality and ability to perform engagements.

Common trap: Option C sounds related because auditors evaluate controls, but auditors do not achieve control objectives; management does.

In practice: During engagement planning the CAE matches staff skills to engagement needs. Where gaps exist, the CAE arranges training, guest auditors, or outside service providers.

Remember: Competence is the foundation of engagement proficiency, so the CAE must match skills to engagement needs.

Drafted with AI assistance and checked against the answer key.