Under which of the following circumstances can the internal audit function rely most confidently on the work performed by external auditors?

The chief audit executive (CAE) can place the most confidence in the work of external auditors when there is a basis to evaluate their work directly. According to IIA Standard 2050, coordination is key, and to rely on the work of other assurance providers, the CAE should assess their competence, objectivity, and the quality of their work. Having access to the external auditors' audit programs and workpapers provides direct evidence of their scope, methodology, and the sufficiency and appropriateness of their audit evidence. This allows the CAE to make an informed judgment about the extent to which their work can be relied upon.

B. Forcing external auditors to use internal audit's methodology is impractical and disregards that they operate under different professional standards (e.g., GAAS).
C. The board's review is a high-level governance oversight function; it does not provide the CAE with the detailed evidence needed to assess the quality of the external audit work.
D. Reviewing final communications is a post-mortem activity. To rely on the work, the CAE needs to understand the process and evidence before the final report is issued.

1. The Institute of Internal Auditors (IIA). (2017). International Professional Practices Framework (IPPF). Standard 2050 – Coordination and Reliance. "The chief audit executive should share information, coordinate activities, and consider relying on the work of other internal and external assurance and consulting service providers to ensure proper coverage and minimize duplication of efforts."

2. The Institute of Internal Auditors (IIA). (2020). Practice Guide: Coordinating with Other Assurance Providers. This guide elaborates on Standard 2050, stating that to rely on another's work, the CAE must assess their competence, objectivity, and due professional care, which often involves reviewing their work plans, scope, and workpapers. (Section: "Assessing Other Assurance Providers").