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Independence and objectivityThe Standard states: The internal audit activity must be independent, and internal auditors must be objective in performing their work. In practice what processes should the Chief Internal Auditor (CIA) have in place to reasonably ensure and demonstrate that threats to the team’s independence are suitably managed and its work undertaken with suitable objectivity? The following are some ideas:
By following the above practical steps, the CIA should be well positioned to discharge and clearly demonstrate their responsibilities (and those of their team) have been undertaken with suitable independence and objectivity. Be aware of perceived rather than simply actual conflicts at all stages of the audit process; from strategy, to resourcing, performance and reporting. As a rule, conducting your work with openness and transparency will stand you in good stead; if in doubt ask and discuss both internally and with your peers. Core Evidence Demonstrating Compliance
The CIA should ensure that robust arrangements are in place to capture, assess and minimise any potential (or perceived) threats to the team’s independence and objectivity. Records should be maintained, updated at least annually and supported by declarations from team members. Specific consideration of any potential threats could be worked into the assignment planning documentation, however, typically the ability to demonstrate that processes are in place to monitor potential threats will be sufficient to demonstrate compliance. When assessing the internal auditor's objectivity An auditor should?11. In assessing competence and objectivity, the auditor usually considers information obtained from previous experience with the internal audit function, from discussions with management personnel, and from a recent external quality review, if performed, of the internal audit function's activities.
When considering the objectivity of internal auditors an independent auditor should 1 point?consider the organizational level to which the internal auditor reports. When assessing internal auditors' objectivity, an independent auditor should: consider the policies that prohibit the internal auditors from auditing areas where they were recently assigned.
What is objectivity in internal audit?Objectivity is an unbiased mental attitude that allows internal auditors to perform engagements in such a manner that they believe in their work product and that no quality compromises are made. Objectivity requires that internal auditors do not subordinate their judgment on audit matters to others. (Source: The IIA).
How does internal audit maintain its independence and objectivity?Practically, independence is achieved by assuring that the internal audit activity has no management responsibility for any of the organization's non-audit functions subject to internal audit assessments, and by separating management of the internal audit activity from the functional oversight of the organization's ...
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