Which of the following Code of Ethics principles specifically requires internal auditors to disclose all material facts known to them that, if not disclosed, may distort the reporting of activities under review?

The Institute of Internal Auditors (IIA) Code of Ethics principle of Objectivity requires internal auditors to exhibit the highest level of professional objectivity in gathering, evaluating, and communicating information. Rule of Conduct 2.3, under the principle of Objectivity, explicitly states, "Internal auditors shall disclose all material facts known to them that, if not disclosed, may distort the reporting of activities under review." This rule ensures that audit communications are balanced, fair, and not misleading due to the omission of critical information.

A. Confidentiality: This principle requires protecting information and not disclosing it without proper authority, which is the opposite of the action described in the question.
B. Transparency: While a valuable concept in governance, "Transparency" is not one of the four principles of the IIA's Code of Ethics (which are Integrity, Objectivity, Confidentiality, and Competency).
C. Integrity: This principle establishes trust and pertains to the honesty, diligence, and responsibility of the auditor, but Objectivity specifically governs the requirement for unbiased assessment and complete reporting.

1. The Institute of Internal Auditors. (2017). International Professional Practices Framework (IPPF). "Code of Ethics," Principle 2: Objectivity, Rule of Conduct 2.3. Retrieved from The IIA's official publications.

2. Moeller, R. R. (2016). Brink's Modern Internal Auditing (8th ed.). John Wiley & Sons. Chapter 4, "The IIA's International Professional Practices Framework: Authoritative Guidance for the Internal Audit Profession," discusses the Code of Ethics, noting that the rule to disclose all material facts is a specific application of the Objectivity principle.

3. Reding, K. F., Sobel, P. J., Anderson, U. L., & Head, M. J. (2020). Internal Auditing: Assurance & Advisory Services (4th ed.). The IIA Research Foundation. Chapter 2, "The International Professional Practices Framework: Authoritative Guidance for the Internal Audit Profession," page 45, explicitly links the disclosure of all material facts to the principle of Objectivity.