Which of the following situations violates The IIA’s principle on objectivity?
A.
Following the restructuring of the company, the chief audit executive now reports functionally to the chief financial officer.
B.
A new member of the internal audit function, who previously served as the company’s accounts payable supervisor for two years, advises on the implementation of a new accounts payable system.
C.
Believing there are errors in a given balance sheet account, an internal auditor decides to expand his testing without first obtaining approval from the board.
D.
An internal auditor avoids reporting material financial statement audit findings, as the accounting department is supervised by the chief audit executive.
The Answer Is:
D
This question includes an explanation.
Explanation:
Objectivity requires internal auditors to make unbiased professional judgments and disclose all material facts that could affect engagement conclusions. Deliberately withholding material findings because the accounting department is supervised by the CAE compromises that impartiality and distorts the audit communication. The Internal Audit Fundamentals material likewise emphasizes that intentionally omitting significant observations is inconsistent with objective internal auditing. Option B describes advisory assistance following prior operational responsibility, which does not automatically constitute the same objectivity violation as providing assurance over one’s own recent work. Option C reflects legitimate professional judgment to expand testing when evidence suggests additional risk. Option A raises organizational independence concerns rather than being the clearest example of an individual auditor violating objectivity. Therefore, intentionally suppressing material findings makes option D the correct answer.
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