According to IIA guidance, which of the following is true when the internal audit activity is asked to investigate potential ethics violations in a foreign subsidiary?
A.
Communication of any internal ethics violations to external parties may occur with appropriate safeguards.
B.
Cultural impacts are less critical where the organization practices uniform polices around the globe.
C.
Cross-cultural differences should always be handled by the staff of the same cultural background.
D.
Local law enforcement should be involved as they are more familiar with the applicable local laws.
According to IIA guidance, internal auditors must maintain confidentiality while appropriately addressing ethical violations. When investigating potential ethics violations in a foreign subsidiary, auditors must adhere to both corporate policies and local regulations while ensuring proper communication protocols are followed.
Why A is Correct:
IIA Standard 2440 – Disseminating Results states that auditors must disclose information to appropriate parties and ensure confidentiality while reporting findings.
IIA’s Code of Ethics and Practice Advisory 1130.A2-1 emphasizes that when disclosing ethics violations externally, proper safeguards must be in place to protect sensitive information and comply with legal requirements.
Internal audits can report ethics violations to regulators or external authorities when required, but such disclosures must follow legal and corporate compliance guidelines.
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