Which of the following scenarios would most likely impair the internal audit activity's independence?
A.
An internal auditor assisted external auditors with a review of the payables department. The auditor worked in the payables department a little over a year ago.
B.
The chief audit executive had responsibility for the risk management function and helped coordinate an audit of that area by a third-party consultant.
C.
The chief audit executive was urged by the chief financial officer to scale down an accounts payable audit due to limited funds to cover audit costs.
D.
A new internal auditor was part of a team reviewing an area for which she was responsible less than a year ago. The consulting engagement was requested by management.
This scenario shows pressure from management (CFO) to limit the scope of an audit — which could compromise the CAE’s independence and objectivity. According to IIA Standard 1110, the internal audit activity must be free from interference in determining scope, procedures, and reporting.
This type of pressure directly threatens independence, as it may prevent the CAE from performing their duties fully.
D. Auditor involved in area she managed <1 year ago (consulting) – For consulting (not assurance), involvement may still be allowed if safeguards exist, though objectivity could still be questioned. It’s less severe than C.
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Kozy
5 days, 7 hours ago