Objectivity And The Internal Audit Function Essay
Objectivity as it relates to the internal audit function is a personal trait that implies a separate analytical method that is conducted without bias to distinct parties who may have a vested interest in the audit findings. Objectivity requires the internal auditor to be impartial while gathering, evaluating, and reporting the results. Objectivity is a necessity if an auditor will be providing both assurance and consulting activities to management and other parties. The factors that an external auditor consider when assessing the objectivity of a client’s internal audit function are :
• Organizational reporting status is adequate to assure audit coverage of major organizational risks as well as consideration of and action on the findings and recommendations or the internal auditors.
• Internal auditor can directly access and reports consistently to the BOD, the audit committee, and the owner-manager.
• BOD, the audit committee, and the owner-manager, supervises employment decisions related to the director of the internal audit function.
• Policies that prevent internal auditors from auditing areas where relatives are employed in audit sensitive or important positions.
• Policies that mitigate other potential conflicts of interest, such as auditing an area where they were employed before becoming a part of the internal audit, or where they will be placed after being a part of the internal audit.
The external auditor must consider four issues when making…