Question

A new staff auditor was told to perform an audit in an area with which the auditor was not familiar. Due to time constraints, the audit was not supervised. The auditor was given the assignment because it represented a good learning experience, but the area was clearly beyond the auditor's competence. Nevertheless, the auditor prepared comprehensive workpapers and reported the results to management. In this situation,

1) the CAE has not violated the Standards because they do not address supervision
2) the audit department violated the Standards by not providing adequate supervision
3) the Standards and the Code of Ethics were followed by the audit department
4) The audit department violated the Standards by hiring an auditor without proficiency in the area

Answer 1

The audit department did not violate the Standards by hiring an auditor without proficiency in the area, but it is important for the auditor to have proper supervision and guidance to ensure accurate results.

Step-by-step explanation:

In this situation, the audit department did not violate the Standards by hiring an auditor without proficiency in the area. It is the responsibility of the audit department to assign auditors to areas where they can gain experience and learn. However, it is important for the auditor to have adequate supervision and guidance when working in unfamiliar areas to ensure accurate and reliable results.

The auditor in this case took on the assignment as a learning experience, but there should have been proper supervision to guide them through the process. Without supervision, there is a risk of incorrect or misleading conclusions. This could compromise the integrity of the audit process and the effectiveness of the final report.

It is crucial for auditors to have the necessary skills, knowledge, and experience to perform audits effectively. Hiring an auditor without the required competence would indeed be a violation of the Standards. However, in this case, the violation lies in the lack of supervision rather than the hiring decision.