An Internal Audit Activity (IAA) Provided Assurance Services for an Activity

question 36

Multiple Choice

An internal audit activity (IAA) provided assurance services for an activity it was responsible for during the preceding year. As a result, which IIA Code of Ethics principle is presumed to be impaired?

• A) Competence.
• B) Flexibility.
• C) Objectivity.
• D) Independence.

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Definitions:

Work In Process Inventories

Inventories that represent goods that are partially completed in a manufacturing process.

Conversion Costs

Costs related to transforming raw materials into finished goods, typically including direct labor and manufacturing overhead.

Physical Units

A measure of production output or inventory, quantified in terms of tangible goods or items.

Direct Materials

Raw materials that are directly traceable to a finished product and are necessary for its production.