The most likely reason for an internal auditor failing to identify transactions between the parent organization and a subsidiary is a lack of understanding of the organization. Understanding the organizational structure, including relationships between parent and subsidiary entities, is crucial for identifying and evaluating intercompany transactions. A thorough knowledge of the organization's operations, financial arrangements, and business processes enables auditors to recognize and properly assess such transactions during their audit engagements.
The Institute of Internal Auditors (IIA) Standards, specifically Standard 1210 - Proficiency.
IIA's International Professional Practices Framework (IPPF).
"Internal Auditing: Assurance & Advisory Services" by IIA, Chapter on Understanding the Business and Audit Planning.

Developing policies and procedures for the internal audit activity is the most effective way for the chief audit executive (CAE) to ensure that internal auditors demonstrate due professional care. This action provides a framework and guidelines that direct auditors on how to perform their duties in accordance with the highest standards of audit practice, including adherence to ethical and professional standards set out by bodies such as the IIA.
IIA Standard 1300 - Quality Assurance and Improvement Program

For general internal audit staff positions, the chief audit executive (CAE) is likely to describe IT requirements as needing to understand IT-related risk and general controls. This requirement is essential for general auditors to evaluate how IT risks impact broader organizational risks and understand basic IT controls without necessarily needing the specialized skills to evaluate IT governance or perform technical IT testing.
General hiring practices for internal auditors as advised by the IIA, focusing on foundational IT knowledge suitable for general audit roles.