Calla Banks is the new CAE for Wells Manufacturing Company. Wells has an internal audit staff of 30 auditors and 3 support personnel. In general, the audit department performs 30-40 assurance engagements per year. The audit committee and senior management have advised Calla that they would like to see the internal audit department start to perform consulting engagements insofar as Wells pays hundreds of thousands of dollars each year to outside consultants.

Please answer the following parts:

A. Give three examples of consulting engagements that a typical internal auditing department could be involved with.

B. Before undertaking a particular consulting engagement, what factors are important for Calla to consider?

C. If an internal auditing team becomes aware of unmitigated risks in a department during a consulting project, will that knowledge have any impact on a later assurance engagement of the same department? Explain.