CIA-1 - Ethics and Professionalism (20% of the exam) - Section B.2
Assess whether an individual internal auditor has any impairments to objectivity, including the impact of self-review and familiarity bias and situations giving rise to conflicts of interest.
Evaluate individual objectivity by identifying biases that erode an unbiased mental attitude, such as self-review bias where an auditor assesses work they previously performed and familiarity bias arising from close relationships with the auditee. Analyse situations where a conflict of interest, a prior operational role, or a personal stake could compromise the auditor's impartial judgement.
ObjectivitySelf-review biasFamiliarity biasConflict of interest
Practice question for this objective
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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.check_circle Correct
Reviewing work you personally performed creates self-review bias, an individual objectivity impairment distinct from familiarity bias and conflict of interest. Self-review bias occurs because an auditor evaluating their own earlier work has an implicit interest in confirming that the work was sound, which undermines the unbiased mental attitude objectivity requires.
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.
Answers that look right on this material and are not. Each one is a distractor from a different question in the CIA-1 bank for this domain.
Self-review bias, because the auditor would be assessing operational decisions and controls that the auditor personally designed for the business unit.
errorWhy it is wrong: This is tempting because both are objectivity impairments, but self-review bias needs the auditor to be reviewing their own prior work; here the concern is a personal relationship, not past involvement.
Assign her to lead the engagement, since two years is long enough for any concern about her former operational role to have lapsed entirely.
errorWhy it is wrong: The passage of time makes this tempting, but no fixed period automatically cures a recent operational role; the conflict of interest must still be assessed and the assignment avoided.
Self-review bias, because the auditor is evaluating a control framework that the auditor personally designed and implemented in an earlier period.
errorWhy it is wrong: This is tempting because it is a named impairment, but self-review bias requires the auditor to be reviewing their own prior work, and here the problem is a financial stake, not past involvement.