Question

what circumstances could cause impairment of internal audit function independence or internal auditor objectivity? How should an identified impairment be handled?

Answer 1

Circumstances causing impairment of internal audit function independence 1) Placing the limitations on the scope of internal audit function by the management of the company might restrict and hamper the independence and objectivity of the internal auditor in effectively carrying out his internal audit activity.. 2) Receiving of gifts, fees or entertainment by an internal auditor from an employee, client, supplier or business associate may lead to impairment of the objectivity of the internal auditor. Ways to handle the above identified impairment 1) Internal auditor should report the offer received by him in respect of all material gifts or fees to their supervisors. 2) As far as placing limitations on the scope of audit function, there should be proper communication, preferably in writing, between the internal auditor and the board of directors of the company. ME