Which of the following offers the best evidence that the internal audit activity has achieved organizational independence?

Which of the following offers the best evidence that the internal audit activity has achieved organizational independence?
A . An independent third party has assessed the organization’s system of internal controls to be adequate and effective.
B . The chief audit executive reports both functionally and administratively to the CEO
C . The internal audit charter is drafted properly and approved by the appropriate parties.
D . The mission statement and strategy of the internal audit activity demonstrates alignment to organizational objectives

Answer: C

Explanation:

The internal audit charter is a formal document that defines the internal audit activity’s purpose, authority, and responsibility. It is crucial for establishing the internal audit function’s independence and objectivity. When the internal audit charter is properly drafted and approved by the appropriate parties, it provides a clear mandate for the internal audit activity and sets the foundation for its operations. This ensures that the internal audit activity can function independently without undue influence from management.

Reference: According to the IIA’s International Standards for the Professional Practice of Internal Auditing (Standards), specifically Standard 1000 (Purpose, Authority, and Responsibility), the internal audit charter is essential in defining the internal audit activity’s role and ensuring its independence.