An Employee Who Recently Transferred into the Internal Audit Activity

question 165

Multiple Choice

An employee who recently transferred into the internal audit activity has been assigned to audit the accounts payable system. Which function, if previously performed by the auditor, would represent a conflict of interest?

• A) Monitoring the allowance for doubtful accounts.
• B) Writing procedures for the handling of duplicate payments.
• C) Signing timekeeping cards for subordinates.
• D) Reviewing shipping documents for accuracy.

---

Definitions:

Compromise Policy

A policy approach that aims to find a middle ground or agreement between differing parties, especially in legislative or corporate settings.

Cash Dividend

A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders in the form of cash.

Growth Opportunities

Prospects or opportunities for a business or investment to expand, leading to increased profits.

Homemade Dividend

A concept where investors sell a portion of their portfolio to create cash flow, as an alternative to receiving dividends from investments.