IIA-CIA-PART1 · Question #196
A chief audit executive (CAE) recruited a few new internal auditors to reduce the resource gaps identified in this year's internal audit plan. One of the new recruits has several years of experience…
The correct answer is C. Ensure that the new auditor's previous manager, and other close former coworkers, are excused. Option C is correct because the new auditor has an objectivity impairment - she worked as a senior supervisor in the finance department just 10 months ago, which falls within the standard one-year cooling-off period recognized by IIA standards. The CAE cannot simply remove her…
Question
A chief audit executive (CAE) recruited a few new internal auditors to reduce the resource gaps identified in this year's internal audit plan. One of the new recruits has several years of experience with the organization. Ten months ago. she served as a senior supervisor in the finance department. However, for the past 10 months, she has been helping the organization with implementing a new IT system. What approach should the CAE take for the upcoming financial statement controls audit?
Options
- AAssign the new auditor to assist with conducting the fieldwork. but ensure that her work is
- BAssign the new auditor to assist with developing the audit program, but ensure that the audit
- CEnsure that the new auditor's previous manager, and other close former coworkers, are excused
- DEnsure that the new auditor is responsible only for the supervisory review, but not the execution
How the community answered
(29 responses)- A14% (4)
- B7% (2)
- C76% (22)
- D3% (1)
Explanation
Option C is correct because the new auditor has an objectivity impairment - she worked as a senior supervisor in the finance department just 10 months ago, which falls within the standard one-year cooling-off period recognized by IIA standards. The CAE cannot simply remove her from the audit entirely (she was hired to fill a resource gap), so the proper mitigation is to manage the familiarity threat: her former manager and close coworkers should be excused from being audited by her, since personal relationships bias judgment in both directions (too lenient or overcompensating to appear independent).
Why A and B are wrong: Assigning her to fieldwork (A) or audit program development (B) still places her in a substantive role auditing an area where her objectivity is impaired - additional review or supervision doesn't eliminate the underlying conflict, it only adds oversight around it.
Why D is wrong: Restricting her to supervisory review is actually worse, not better - she would be reviewing others' conclusions on an area she personally managed, which compounds the independence risk rather than containing it.
Memory tip: Think of it as the "proximity shield" rule - you can use an auditor with a recent connection to an audited area, but you must shield her former colleagues from her specific review. The conflict is interpersonal, so the fix is interpersonal: remove those people from her scope.
Community Discussion
No community discussion yet for this question.