The internal audit activity was denied access to expenditure and budget reports because they were considered to be confidential. This situation would result in which of the following limitations of…

Question

Options

• AIndependence
• BIntegrity
• Cobjectivity
• DAuthority

• A
  13% (3)
• B
  9% (2)
• C
  4% (1)
• D
  74% (17)

Explanation

Authority (D) is correct because the IIA Standards require that the internal audit activity have unrestricted access to all records, personnel, and assets needed to perform its work. When management denies access to the expenditure and budget reports - regardless of their claimed confidentiality - this directly limits the audit activity's organizational authority: its formal, charter-granted right to examine evidence. The limitation is structural (a denial of power), not personal.

Why the distractors are wrong:

• A (Independence) refers to freedom from conditions that impair impartial judgment - it's about interference with how auditors think, not blocking what they can see.
• B (Integrity) is a personal ethical attribute (honesty, trustworthiness) of the auditors themselves; it has nothing to do with management restricting document access.
• C (Objectivity) is an individual mental attitude - freedom from bias and conflicts of interest - again a personal characteristic, not an organizational access problem.

Memory tip: Associate Authority = Access Rights. Anytime someone blocks the door to records or people, they are limiting the audit activity's authority (its formal power to enter and examine). The other three options - independence, integrity, objectivity - all describe qualities inside the auditor, not organizational powers granted by the audit charter.

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