If an Engagement Client Disputes That a Specific Action or Process

Multiple Choice

If an engagement client disputes that a specific action or process is within the scope of the internal audit activity, what would be the most appropriate way for the internal audit activity (IAA) to respond?

A) Terminate the audit engagement in full because an operational audit will not be productive without the client's cooperation.
B) Terminate only the specific action or process with which the client disagrees and work to determine a substitute function that will not impede further IAA or the client-audit relationship.
C) Refer the client to the IAA's charter and the approved yearly audit plan, which includes the areas designated for audit in the current time period.
D) Seek the approval of senior management or the board in mediation, allowing an overseer to clarify the scope of the audit engagement for the client.