According to attribute standard 1100, the internal audit activity must be independent and internal auditors must be objective in performing their work. Independence is the “freedom from conditions that threaten the ability of the internal audit activity or the chief audit executive (CAE) to carry out internal audit responsibilities in an unbiased manner. ” Objectivity is “an unbiased mental attitude that allows internal auditors to perform engagements in such a manner that they believe in their work product and that no quality compromises are made.
Objectivity requires that internal auditors do not subordinate their judgment on audit matter to others. ” Both objectivity and independence must be managed at the individual auditor, engagement, functional, and organizational levels. In order to achieve independence the CAE must be able to communicate directly with the board. Independence and objectivity are critical to the profession of internal auditing. Internal auditing is intended to add value and improve operations. It helps businesses achieve objectives by evaluating risk management, control, and governance processes.
In order for the internal auditor to be able to add this value it is critical that they are able to have unbiased judgments and separate themselves from any conflicts of interest. One main difference between objectivity and independence is that objectivity is an attribute of the auditor and independence is an attribute of internal auditing. Any auditor can be objective. They can be a completely unbiased and honest person, but that alone does not suffice. Placing any objective person into an internal audit function that is not independent could greatly affect that person.
... of independence. ) The task and responsibility assigned to the internal auditor c) The professional competence of the internal audit ... description of internal auditing as promulgated by the Institute of Internal Auditors is that “internal auditing is an independent, objective assurance ... his assignment with an open mind objectivity. Very often internal auditors slip into overblown perceptions of their ...
Losing independence from the definition and the standards would have a dramatic affect on internal auditing. Objective auditors could be placed in situations which would put their unbiased judgment at risk. Management would not have the same level of trust with their internal audit function. Internal auditing would not have the same level of integrity without guaranteeing independence. Independence and objectivity need each other, without one the other is lost. Objectivity alone would not suffice and without independence too much would be lost. Independence and objectivity are critical to the profession of internal auditing.