Two Individuals Are Being Considered for an Audit Team That

question 143

Multiple Choice

Two individuals are being considered for an audit team that is to perform a highly technical review. Which of the following situations would preclude selection of the individual for the audit due to an objectivity concern?

• A) Person A is a member of the internal audit staff and has the required technical skills. Person A participated in a controls review of the system to be audited when it was being developed. II. Person B is a technical specialist who understands the audit area but is not a member of the internal audit staff. Although person B has personal credibility in the information systems department to be audited, person B works for another department in the organization.
• B) I only
• C) II only
• D) Both I and II.
• E) Neither I nor II.

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Definitions:

Stock Dividend

A distribution by a company to its shareholders through extra shares instead of monetary payment.

Dividends Payable

A liability account that represents the amount a company owes to its shareholders as declared dividends but has not yet paid out.

Paid-in Capital

Funds raised by a company through the sale of shares to investors, representing the equity capital invested in the business.

Reacquire Stock

The process by which a company buys back its own shares from the marketplace, reducing the amount of outstanding stock.