Certified Internal Auditor (CIA) Part 1: Business Acumen — Question 129

To encourage internal audit objectivity, which of the following is an appropriate policy the chief audit executive should establish?

Answer options

• A. Internal auditors should report their audit findings directly to the audit committee.
• B. To receive an outstanding performance rating, internal auditors are required to generate audit findings.
• C. Prior to hiring a new internal auditor, the chief audit executive must determine whether the auditor owns stock in the organization.
• D. Internal auditors are permitted to audit an entity managed by a close friend or relative, as long as they notify the chief audit executive.

Correct answer: A

Explanation

The correct answer, A, ensures that internal auditors maintain independence by reporting directly to the audit committee, which helps uphold objectivity. Options B and C create potential biases by linking performance ratings to audit findings and considering personal financial interests, respectively. Option D allows conflicts of interest by permitting audits of entities managed by friends or relatives, undermining objectivity.