To assist the board in gaining a better understanding of the degree of ethics awareness within the organization, the most appropriate action would be to request the internal audit activity to perform an ethics-related assurance engagement. This type of engagement would directly assess the organization's ethical culture and practices, providing the board with a detailed and objective evaluation of ethics awareness and related issues throughout the organization.
IIA's guidance on the role of internal auditing in organizational ethics.

The authority of the internal audit activity, as outlined in the audit charter, includes having full access to the organization's records, physical property, and personnel necessary to conduct audit engagements. This access is critical for the internal audit activity to perform its duties effectively and independently, ensuring that auditors can obtain the information and resources they need to evaluate the organization's processes and controls comprehensively.
The IIA Standards: Standard 1000 - Purpose, Authority, and Responsibility: "The purpose, authority, and responsibility of the internal audit activity must be formally defined in an internal audit charter... The chief audit executive must periodically review the internal audit charter and present it to senior management and the board for approval." The IIA Practice Guide: "Understanding the Importance of the Internal Audit Charter": Emphasizes the necessity for the internal audit activity to have unrestricted access to organizational records, property, and personnel.

The internal audit activity reporting functionally to the chief financial officer (CFO) can impair an internal auditor's independence. Functionally reporting to the CFO, who may be responsible for areas under audit, could create a conflict of interest and affect the auditor's ability to act independently. This arrangement can compromise the objectivity required for the internal audit function as outlined in the IIA standards.
IIA Standard 1110 - Organizational Independence

To prevent situations where an internal auditor's impartiality could be questioned, it is essential to have a process in place that requires auditors to disclose any potential conflicts of interest. This helps to identify and address any relationships or circumstances that might compromise, or appear to compromise, the auditor's objectivity and independence. Ensuring that such disclosures are made before assignments are accepted can prevent conflicts of interest from affecting the audit process.
IIA Code of Ethics: Objectivity Principle
IIA Standard 1120: Individual Objectivity