The most important factor in the internal audit activity's independence specified in an internal audit charter is the description of the internal audit activity's reporting structure. This element defines to whom the chief audit executive reports functionally and administratively, which is critical to ensuring the independence and objectivity of the internal audit function from management and other potential sources of bias.
The IIA's International Standards for the Professional Practice of Internal Auditing on independence and objectivity.

The board of directors is responsible for setting the risk appetite of the organization. They define the level and type of risk the organization is willing to accept in pursuit of its goals and objectives. This strategic role ensures that the organization's risk management framework aligns with its long-term vision and governance structure.
IIA guidance on governance and risk management

Section: Volume C