Which of the following requests, if accepted by the internal audit activity, would impair its independence?

Question

Options

• AA request to develop workshops on corporate governance for management.
• BA request to act as liaison with external auditors.
• CA request to determine appropriate risk management responses for management.
• DA request to provide counseling services on ethical matters.

• A
  6% (1)
• B
  6% (1)
• C
  12% (2)
• D
  76% (13)

Explanation

Accepting responsibility for counseling services on ethical matters places the internal audit activity in an operational, ongoing management role - running a service that belongs to management - which would later compromise auditors' ability to objectively evaluate the ethics function they actively administered. The impairment arises because auditors cannot independently assess a program they are operating.

Why the distractors are wrong:

• A (governance workshops): Delivering training is a one-way educational activity; auditors are sharing knowledge, not making decisions or assuming management ownership.
• B (liaison with external auditors): Coordinating between audit functions is a widely accepted, non-decision-making role that poses no independence threat.
• C (risk management responses): Auditors may facilitate and recommend risk responses as a consulting service - as long as management retains final decision authority, independence is preserved.

Memory tip: Ask yourself, "Does this put internal audit in the driver's seat of an ongoing management function?" Training, liaising, and advising are all support roles. Running a counseling service means internal audit owns an operational program - and you cannot independently audit what you operate.

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