Drafting operational procedures for an area and then auditing the same area is considered a threat to an internal auditor's objectivity because the auditor may be auditing their own work. This situation presents a self-review threat, where the auditor's independence can be compromised as they might be biased towards the procedures they themselves have created.
IIA Standard 1120 - Objectivity, which states that internal auditors should not audit their own work or provide assurance on activities for which they were previously responsible.

The internal audit activity can be considered a type of governance control. Governance controls are those that are designed to ensure that the overall direction, administration, and control of an organization are maintained.
The internal audit provides assurance on the effectiveness of governance, risk management, and internal controls.
The IIA's guidance on the role of internal auditing in enterprise-wide risk management.

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.

Inherent risk refers to the exposure or possibility of an adverse outcome arising in an activity or environment, assuming no controls are in place to mitigate it. This risk exists independently of any action by the organization and considers both internal and external risk factors in their natural, uncontrolled state.
Institute of Internal Auditors (IIA) Glossary and Standards.

Given that the CFO dismissed the concern due to a lack of understanding of the data analytics test and the perceived insignificance of the transaction, the internal auditor should improve soft skills, specifically communication and negotiation. Enhancing these skills would help the auditor better explain the significance of findings and persuade management of the need to address such issues, regardless of transaction value.
Institute of Internal Auditors (IIA) - Competency Framework for Internal Auditors