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One of the reasons that internal auditors shouls not report to the finance director is that the finance director can amend some things on the internal audit report to favour himself before the report is sent to the board.
Is it also that the finance director appoints the internal audit, so the internal audit may feel uncomfortable to critisize the finance director?
Im not sure if the finance director appoints the internal audit
They shouldn’t appoint the internal auditor for the reason to which you allude – that the internal auditors independence would be compromised or seen to be compromised.In other words the internal auditor could be uncomfortable criticising the person or one of the people involved in appointing them to the position.The nomination committee should appoint the internal auditng committee of the board which should in turn appoint the internal auditor or oversee the internal audit function of the organisation.
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