Which of the following would be a potential concern if the board member’s suggestion is adopted?

The board of a newly established organization was discussing the contents of the draft internal audit charter One board member suggested adding to the charter an obligation for the internal audit activity to develop controls in business procedures. The board member explained that the new organization needs professional-level developers, internal auditors have the necessary skills and competencies, and the internal audit activity is well positioned to assume this responsibility.

Which of the following would be a potential concern if the board member’s suggestion is adopted?
A . Due professional care.
B . Internal audit objectivity.
C . Risk management assurance.
D . Professional development.

View Answer

Answer: B

Explanation:

According to the standards and practices of internal auditing, the internal audit function is primarily responsible for providing an independent and objective assurance and consulting service aimed at adding value and improving an organization’s operations. If internal auditors were tasked with developing controls in business procedures, it could compromise their objectivity. Objectivity is crucial as it allows auditors to carry out audits impartially and without bias. Involvement in control creation could lead internal auditors to later audit their own work, which is a conflict of interest and undermines the principle of independence and objectivity as set by the Institute of Internal Auditors (IIA).

Reference: The Institute of Internal Auditors (IIA) – International Standards for the Professional Practice of Internal Auditing