Which of the following activities would compromise the independence of the internal audit activity and therefore should not be performed by an…

Comprehensive and Detailed Step-by-Step Explanation:

Reference to IIA Standards:

Standard 1110 - Organizational Independence: Internal audit must be independent of the activities it

audits to maintain objectivity.

Standard 1130 - Impairment to Independence or Objectivity: Internal audit’s independence is

compromised if auditors take on roles that involve making decisions or implementing controls, as

this may bias their findings.

Reasoning:

Option B is correct because setting the organization’s risk appetite is a management decision and

represents a strategic role that compromises the internal audit's independence.

Option A (championing the establishment of risk management) and Option C (coordinating risk

management) do not directly impair independence, though care should be taken to avoid direct

involvement in risk management decisions. These activities can be part of advisory services and not

necessarily a threat to independence if appropriately managed.

Maintaining Independence:

Internal auditors should provide assurance on risk management but not take on roles that involve

decision-making or implementing risk management processes.