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Internal auditors are not independent of the organisations they serve, but the internal audit activity should be organisationally independent of the areas it must audit. While not necessarily personally independent, internal auditors should nonetheless always strive to be fully objective in carrying out their work. That’s the essence of Attribute Standard 1100: Independence and Objectivity.
Standard 1100 states: “The internal audit activity must be independent and internal auditors must be objective in performing their work.”
Employee or contractor, either way, internal auditors depend on the companies or institutions that pay them. Dependence, however, does not preclude objectivity.
Independence, in this case, refers to the freedom to conduct audit activities in an unbiased manner, and how important it is for chief audit executives to have direct and unrestricted access to senior management and the board. Factors affecting independence are primarily structural and pertain to how high in the organisation the internal audit function reports.
Objectivity is an unbiased mental attitude that allows internal auditors to go into an engagement with no preconceived notion of what they are going to find, and to perform their work without compromise. Attribute Standard 1120: Individual Objectivity covers this well by stating, “Internal auditors must have an impartial, unbiased attitude and avoid any conflict of interest".
Factors affecting objectivity are more varied. They include social pressure, economic interests, personal relationships, racial and gender bias, familiarity, cognitive bias, self-review, and intimidation, among other factors.