The IAB (idle air bypass) solenoid bypasses air around the throttle body plate to help control idle speed. The ecu also advances/retards the timing to make idle speed adjustments.
Code 16 for a KOEO test indicates a problem with the IDM -- specifically that the ecu isn't receiving it's continuous ignition signal. It monitors ignition for a variety of uses - faults in the ignition system, rpm is used to control idle and many other calculations. Code 16 means the ecu isn't receiving the ignition signal it needs.