Objectivity vs Independence

Categories: BusinessIndependence

According to associate standard 1100, the internal audit activity need to be independent and internal auditors must be objective in performing their work. Independence is the "flexibility from conditions that threaten the ability of the internal audit activity or the chief audit executive (CAE) to perform internal audit responsibilities in an unbiased manner." Objectivity is "an impartial psychological mindset that enables internal auditors to perform engagements in such a manner that they believe in their work product which no quality compromises are made.

Objectivity needs that internal auditors do not subordinate their judgment on audit matter to others." Both neutrality and independence need to be handled at the private auditor, engagement, functional, and organizational levels. In order to achieve independence the CAE need to be able to communicate straight with the board. Self-reliance and neutrality are important to the profession of internal auditing. Internal auditing is intended to include worth and improve operations. It assists businesses attain goals by assessing danger management, control, and governance procedures.

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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.

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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.

Updated: Jul 07, 2022
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Objectivity vs Independence. (2016, Sep 17). Retrieved from https://studymoose.com/objectivity-vs-independence-essay

Objectivity vs Independence essay
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