What factors impair the independence of internal auditors ?

Achieving independence and objectivity in work is one of the critical preconditions that internal auditors need to meet to serve the purpose. Independence means ensuring the possibility of objective performance of internal auditor's duties, and is linked to the organizational positioning of internal audit in the company, reporting relationships with boards of directors, audit committee, or other governing bodies separated from the management, authority for the evaluation of information, reports, and the like. The following factors impairing the independence of internal auditors: Business relationship: involves common commercial or financial interest between the auditor and client. This shall create self-interest or advocacy threats towards audit independence. Therefore, the business relationship shall be restricted as much as possible. Let's take an example: The wife of auditor is the supplier of the client. The auditor here has indirectly created business relationship between him and the client. Employment with audit client: Any kind of employment relationship with the Auditee Client gives the impression that the audit is not performed independently. Such relationships create self-review threats, familiarity threats, and intimidation threats. Prior work with audit client: The senior personnel may have had prior work experience with the audit client. This ought to create familiarity and self-interest threats if the work experience resulted in good relationships between them. Such association may create or help in the longer audit tenure of the audit function. This will in turn impact the audit independence and objectivity. Gift and hospitality: The auditors should not accept any gifts (or kind) from the auditee. The acceptance of such gifts may impair the auditor's objectivity. The internal auditors are also required to immediately report any such offer to their supervisors if any. Such gift and hospitality ought to create familiarity and self-interest threats. Family and personal relationships: There may exist family and personal relationships between member of audit team and audit client. This creates self-interest and familiarity threats towards audit independence. Non-audit services to audit clients: Offering non audit services to audit clients creates self-review threats to auditor's independence inherent in the model of business of audit firms.