Which of the following would be considered a violation of The HAfs mandatory guidance on independence?

Which of the following would be considered a violation of The HAfs mandatory guidance on independence?
A . The chief audit executive (CAE) reports functionally to the board and administratively to the chief financial officer.
B . The board seeks senior management’s recommendation before approving the annual salary adjustment of the CAE.
C . The CAE confirms to the board, at least once every five years, the organizational independence of the internal audit activity,
D . The CAE updates the internal audit charter and presents it to the board for approval periodically, not on a specific timeline

View Answer

Answer: B

Explanation:

According to the IIA’s mandatory guidance on independence, allowing senior management to have influence over the CAE’s salary adjustments could potentially compromise the independence of the internal audit function. The board should independently approve the CAE’s salary without seeking senior management’s recommendation to maintain the internal audit function’s independence.

Reference: The Institute of Internal Auditors (IIA) – International Standards for the Professional Practice of Internal Auditing, specifically standards related to independence.