Comprehensive and Detailed Step-by-Step Explanation:
* Reference to IIA Standards:
* Standard 1120 - Individual Objectivity: Internal auditors should avoid situations that impair their ability to provide unbiased assurance.
* Practice Advisory 1130.A1-1: Objectivity is impaired if auditors audit activities they previously managed within the last 12 months.
* Reasoning:
* Option Ais correct because the auditor's recent role in the audited area creates a conflict of interest and threatens objectivity.
* Option Bdoes not impair objectivity; leveraging prior knowledge is permissible if applied objectively.
* Option C(consulting services two years prior) does not impair objectivity due to theelapsed time.
* Mitigating Actions:
* Auditors with recent involvement in an audited area should disclose the conflict and be reassigned to preserve objectivity.