According to HA guidance, which of the following is true regarding independence and objectivity for small internal audit activities?

Question

Options

• AThe chief audit executive (CAE) may consider including a disclaimer on independence in audit
• BThe CAE may consider greater involvement of those with suitable knowledge of audit practice.
• CConformance with this Standard is not dependent upon the size of the internal audit activity.
• DDue to the small size of the internal audit activity, having an external assessment once every seven

• A
  4% (1)
• B
  85% (22)
• C
  8% (2)
• D
  4% (1)

Explanation

Option B is correct because IIA guidance specifically recognizes that small internal audit activities face practical challenges to independence and objectivity, and recommends that the CAE consider greater involvement of persons with suitable knowledge of audit practice - such as external quality assessors or consultants - to compensate for the limitations inherent in a small team structure.

Why the distractors are wrong:

• A is incorrect because adding a disclaimer on independence does not satisfy the Standard - it merely acknowledges a problem rather than mitigating it; IIA guidance does not endorse disclaimers as a solution.
• C is a true statement in general (size does not excuse non-conformance), but it does not reflect specific guidance for small activities - it is too generic to be the best answer here.
• D is incorrect because the IIA Standard still requires external quality assessments at least every five years, not seven; small size does not extend that deadline.

Memory tip: Think "small team = bring in outside help." When a small audit activity lacks the internal bench strength to maintain full independence, the IIA's answer is to involve knowledgeable external parties, not to lower standards or add disclaimers.

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