A former line supervisor from the Financial Services Department has completed six months of a two- year development opportunity with the internal…

The core issue is the internal auditor's objectivity regarding the specific audit engagement. According to the IIA's International Standards for the Professional Practice of Internal Auditing, objectivity is presumed to be impaired if an auditor provides assurance services for an activity for which they had responsibility within the previous year. In this scenario, the auditor's previous responsibility was in the Financial Services Department. The audit is of the payroll function, which is managed by the Human Resources Department. Since she had no prior responsibility for the area being audited, her objectivity is not presumed to be impaired, and she may participate in the audit.

A. The one-year restriction applies only when auditing specific operations for which the auditor was previously responsible. This restriction is not relevant here as she is auditing a different department.
C. While supervision by an auditor-in-charge is standard practice for any audit team member, especially a trainee, it is not the primary reason she is permitted to participate from an objectivity standpoint.
D. The fact that the assignment serves as a training opportunity is the purpose of her participation, not the justification for her independence and objectivity, which is the central issue of the question.

1. The Institute of Internal Auditors (IIA). (2017). International Standards for the Professional Practice of Internal Auditing (Standards).

Standard 1130.A1: "Internal auditors must refrain from assessing specific operations for which they were previously responsible. Objectivity is presumed to be impaired if an internal auditor provides assurance services for an activity for which the internal auditor had responsibility within the previous year." This standard directly supports that the impairment rule is tied to previous responsibility, which does not exist in this scenario.

2. The Institute of Internal Auditors (IIA). (2017). Implementation Guide 1130: Impairment to Independence or Objectivity.

Paragraph on "Assessing Operations for Which Internal Auditors Were Previously Responsible": This guide clarifies that the one-year cooling-off period is a critical safeguard against self-review. As the auditor is not reviewing her own prior work or the work of her former department (Financial Services), this safeguard is not triggered for an audit of the Human Resources Department.

3. Moeller, R. R. (2016). Brink's Modern Internal Auditing (8th ed.). John Wiley & Sons.

Chapter 4, Section on "Internal Auditor Objectivity": This academic text discusses that objectivity threats often arise from prior roles, economic interests, or personal relationships related to the audited entity. The scenario does not present such a threat, as the auditor's prior role was in a separate functional area from the one being audited.