Which of the following situations is most likely to prompt the internal audit activity to disclose its nonconformance with the Standards?
A.
One of the organization's senior internal auditors owns a side business, though to date, no sales have been made to this business.
B.
The annual internal audit plan includes performance audits of main business processes, but reviews of high-risk development projects were not considered.
C.
The internal audit activity committed to carrying out an audit of documentation on investment hedging, and a hedging expert was contracted to assist with the engagement.
D.
A periodic quality self-assessment of the internal audit activity identified a number of improvement areas with regard to key performance indicators.
The internal audit activity must align its activities with the organization’s risks. Not considering high-risk development projects in the audit plan could indicate nonconformance with the Standards, specifically regarding risk-based planning. The Standards require internal audit to consider all significant risks when developing the audit plan, and failing to do so may require disclosure of nonconformance. References: The IIA’s International Standards for the Professional Practice of Internal Auditing (Standards), specifically Standard 2010 - Planning, and Standard 1300 - Quality Assurance and Improvement Program.
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