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CS Professional · Internal and Forensic Audit · Emerging Issues and Challenges

Which of the following would most likely threaten the objectivity of the internal auditor of Ganga Chemicals Ltd when auditing the company's ESG disclosures?

Auditing an ESG data process that the auditor earlier designed or operated threatens objectivity because of a self-review threat. Risk-based planning, reporting to the audit committee and use of analytics are sound practices that do not impair independence.

  1. AReviewing the reporting process using a risk-based plan
  2. BHaving earlier been the person who designed and operated the ESG data collection process for the companyCorrect
  3. CReporting findings functionally to the audit committee
  4. DUsing data analytics to test emissions data

Explanation

Auditing a process one has designed or operated creates a self-review threat to objectivity. The other options are normal good practice: risk-based planning, functional reporting to the audit committee and the use of analytics support independence and quality. Such an auditor should be kept away from reviewing that process, at least for a cooling-off period.

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