A conflict of interest is a situation where an internal auditor's personal or professional interests may compromise their objectivity, integrity, or ability to perform their work effectively2. An internal auditor should avoid any conflicts of interest or disclose them to the appropriate parties if they cannot be avoided3. A conflict of interest policy is a document that defines what constitutes a conflict of interest, how to identify and report it, and how to manage or resolve it4. Therefore, option D is the best answer, as it would assist the internal auditor in this situation by providing clear guidance and expectations on how to handle the potential conflict of interest arising from their aunt's involvement in the area under review.
References:
1: How to avoid conflict of interest with auditors | Smolin Lupin3 2: Auditing, Conflict of Interest, and Credibility: Conducting a ...5 3: Independence and Objectivity - The Institute of Internal Auditors or The IIA2 4: Conflict of Interest - Internal Audit and Security Staff4