An internal audit activity (IAA) provided assurance services for an activity it was responsible for during the preceding year.
As a result, which IIA Code of Ethics principle is presumed to be impaired?
An internal audit activity (IAA) provided assurance services for an activity it was responsible for during the preceding year.
As a result, which IIA Code of Ethics principle is presumed to be impaired?
Objectivity is the IIA Code of Ethics principle that is presumed to be impaired because the internal audit activity had responsibility for the area during the previous year. This prior involvement compromises the objectivity of the auditors, as they might not be able to evaluate their own past work in a completely unbiased manner. Objectivity is critical for auditors to provide impartial and accurate assessments.
Internal auditors are objective, whereas the internal audit activity is independent. In this particular case, it is the activity that is objective.
Independence mainly concerns the CAE, as well as the hierarchical and functional reporting relationship of the IAA. It seems that when these aspects (above) are not clearly specified, it is a concern of objectivity (of the IIA or of the internal audit staff).