IIA Exam IIA-IAP Topic 2 Question 10 Discussion

Actual exam question for IIA's IIA-IAP exam

Question #: 10
Topic #: 2

[All IIA-IAP Questions]

Which of the following best ensures that the internal audit activity is free from undue interference from management?

AAudit policies and procedures that are comprehensive and well-documented, in accordance with the Standards.

BA board audit committee that is composed of competent, independent members.

CAn audit charter that defines the chief audit executive's functional reporting relationship with the board.

Show Suggested Answer

Suggested Answer: C

Comprehensive and Detailed Step-by-Step Explanation:

Reference to IIA Standards:

Standard 1110 - Organizational Independence: The chief audit executive (CAE) must report functionally to the board to ensure independence.

The audit charter must define the CAE's functional reporting line to the board, securing protection from undue management influence.

Reasoning:

Option C addresses the foundational document---the audit charter---that establishes the CAE's authority and independence.

Option A refers to operational standards, but they do not directly safeguard against interference.

Option B strengthens governance but is secondary to the audit charter in securing independence.

Impact:

A robust audit charter formalizes the CAE's reporting relationship and ensures organizational independence, empowering internal audit.

by Layla at Apr 08, 2025, 02:39 PM

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Na

2 months ago

A board audit committee? Sounds like a secret society of forensic accountants. I'll take the magic charter, please!

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Allene

22 days ago

True, but having a competent and independent board audit committee can also help prevent interference from management.

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Jules

27 days ago

I agree, but having an audit charter that clearly defines the reporting relationship with the board is also important.

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Lawana

29 days ago

I think having comprehensive audit policies and procedures is key to ensuring independence.

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Audry

2 months ago

The audit charter is the way to go. It's like a force field around the internal auditors - management can't just waltz in and start pulling strings.

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Elbert

12 days ago

That's right, the audit charter is crucial for maintaining independence and ensuring management doesn't interfere.

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Lavonne

20 days ago

C) An audit charter that defines the chief audit executive's functional reporting relationship with the board.

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Caitlin

22 days ago

B) A board audit committee that is composed of competent, independent members.

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Dorinda

1 months ago

A) Audit policies and procedures that are comprehensive and well-documented, in accordance with the Standards.

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Dana

2 months ago

Comprehensive audit policies and procedures are a good foundation, but the formal reporting structure is really the strongest safeguard in my opinion.

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Leonida

26 days ago

Comprehensive policies and procedures are great, but ultimately the reporting structure is key to maintaining independence.

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Zoila

1 months ago

I think having an independent board audit committee is also important to ensure there is no interference from management.

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Dexter

1 months ago

I agree, having a strong audit charter that clearly defines the reporting relationship is crucial.

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Ming

2 months ago

A board audit committee with independent members is key. They can provide oversight and shield the internal audit team from undue influence.

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Chi

2 months ago

I think the audit charter with the CAE's functional reporting relationship to the board is the best way to ensure audit independence. It's clear and formal.

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