During the Course of an Audit, an Internal Auditor Discovers

During the course of an audit, an internal auditor discovers that a valuable employee in the research department has been patenting new developments in the employee's name that are unrelated to the basic business of the organization. The organization does not have a policy addressing this specific issue, but does have a general policy that all important new discoveries by employees are the property of the organization. Division management views the employee's actions as extra incentive to retain the employee. A decision to include the employee's action in the engagement final communication would be: 1. A violation of the IIA Code of Ethics. 2. A violation of the reporting requirements in the Standards. 3. Justified and necessary, according to the IIA Code of Ethics and Standards.

A) 1 only
B) 2 only
C) 3 only
D) 1 and 2 only