An internal auditor is assigned to provide assurance over a monthly reconciliation control that the same auditor personally designed and put into operation during the previous year. Which impairment to individual objectivity does this situation most directly raise?
- AFamiliarity bias, because the auditor's long-standing relationship with the reconciliation team may make the auditor too trusting of the explanations the team offers.
- BA conflict of interest, because the auditor holds a competing personal or financial interest in the reconciliation control producing a favourable outcome.
- CA loss of the internal audit function's organisational independence, because the function must be reporting to the wrong level within the organisation.
- DSelf-review bias, because the auditor would be evaluating a control that the auditor previously designed and implemented, and may be reluctant to criticise that earlier work. Correct
Why A is wrong: This is tempting because both are objectivity impairments, but familiarity bias arises from a close relationship with people, whereas the concern here is that the auditor is reviewing work the auditor performed.
Why B is wrong: This is tempting because it is a named impairment, but nothing in the situation gives the auditor a personal stake in the result; the issue is prior involvement in the work itself.
Why C is wrong: This is tempting because independence and objectivity are related, but organisational independence concerns the function's structural position, not one auditor reviewing their own prior work.
Why D is correct: Correct: self-review bias arises when an auditor assesses work they themselves performed, creating pressure to validate rather than objectively test their own earlier decisions.