ACCA Strategic Professional · Strategic Business Leader · Audit and compliance
Brandt Logistics has a small in-house internal audit team. Next year it plans to enter five new countries, each with unfamiliar regulation and a complex IT environment. The team lacks the relevant local and IT expertise. Which option best addresses the need while keeping control with the company?
Co-sourcing is best: the company keeps its in-house team for ongoing work and buys specialist overseas and IT expertise as needed. This fills the skills gap while preserving direction by the audit committee, unlike self-assessment or using the external auditor.
- ADisband the team and rely on management self-assessment
- BCo-source: retain the in-house team and bring in a specialist provider for the overseas and IT reviewsCorrect
- CAsk the external auditor to perform the overseas internal audits
- DPostpone all internal audit work until expansion is complete
Explanation
Co-sourcing combines in-house knowledge with specialist skills for particular areas and keeps the internal audit function under the company's direction. Management self-assessment lacks independence. Using the external auditor for internal audit creates self-review and independence threats.
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