Independence, Objectivity, and Ethics

Question 1

Independence

Answer 1

The freedom from conditions that threaten the ability of the internal audit activity to carry out internal audit responsibilities in an unbiased manner.

Question 2

Organizational independence exists if the CAE:

Answer 2

1. Reports functionally to the Board (audit committee)
2. Reports administratively to the CEO (or similar)

Question 3

CAE (access)

Answer 3

CAE has direct and unrestricted access to the Board and Senior Management.

Question 4

Report about organizational independence

Answer 4

Annual reporting on organizational independence to the Board.

Question 5

Interference (disclose)

Answer 5

Internal audit must be free from interference, or must disclose this to the Board.

Question 6

Internal audit must control without interference Management:

Answer 6

1. The scope of work
2. The performance of work
3. The reporting of results