To promote the independence of the internal audit activity, it is required that the chief audit executive reports functionally to the board. This structural alignment helps ensure that the internal audit function is not unduly influenced by management, which might be the subject of audits, and can freely report on its findings and recommendations without fear of reprisal.
The IIA's International Standards for the Professional Practice of Internal Auditing on independence and objectivity.

The organizational independence of the internal audit activity is most likely to be impaired if the chief audit executive (CAE) reports administratively to the chief financial officer (CFO). Reporting to the CFO can create a conflict of interest and reduce the perceived and actual independence of the internal audit function, as the CFO has direct involvement in financial management and operations, which are common subjects of audits. This reporting structure could potentially limit the CAE's ability to report issues impartially and independently.
IIA's International Standards for the Professional Practice of Internal Auditing regarding organizational independence.

IIA standards require that external quality assessments be conducted at least once every five years by an independent assessor. This ensures adherence to quality standards and strengthens the objectivity of the internal audit function.

The indication that an internal auditor was assigned to an assurance engagement is most strongly given by the requirement that the auditor must not assume management responsibilities while performing the engagement.
This aligns with the principles of objectivity and independence, which are critical in assurance engagements to provide unbiased and reliable conclusions. Taking on management responsibilities could compromise the auditor's objectivity by involving them in the operations they are auditing.
IIA's International Standards for the Professional Practice of Internal Auditing.

Using information from an engagement to assist a friend's business violates the IIA Code of Ethics, as it breaches confidentiality and objectivity. Internal auditors must maintain impartiality and not misuse information for personal or external advantage.