Question

An internal auditor is auditing a division in which the division's CFO is a close personal friend. The auditor learns that the friend is to be replaced after a series of critical contract negotiations with the Department of Defense. The auditor relays this information to the friend. Which principle of the IIA's Code of Ethics has been violated?

a. integrity
b. objectivity
c. confidentiality
d. privacy

Answer 1

The auditor violated the principle of confidentiality from the IIA's Code of Ethics by sharing sensitive information with a personal friend.

Step-by-step explanation:

The principle of the IIA's Code of Ethics that has been violated in the scenario described is confidentiality. The internal auditor had access to sensitive information regarding a division's CFO and the upcoming negotiations with the Department of Defense. By sharing this information with the friend, the auditor breached the requirement to keep information confidential, which could affect the fairness and integrity of the division's operations and upcoming negotiations.