[Givemesleep]

From my study material:

What would have a greater effect on an Internal Auditors objectivity?

The fact that the audit committee reviews decisions about promotions of the chief internal auditior or

The fact that the internal auditor used to work for the indepenant auditor’s cpa firm/

I eliminated the other two choices because they ar obviously wrong. But not sure which of the above two is correct. I have the answer, just wanted to see what everyone else thinks and why. Thanks to all, and Jeff too

Reg 11/15/2011 - 80
Aud 02/28/2012 - 81
Bec 05/31/2012 - 78
Far 08/31/2012 - 83 Do you believe in Miracles, YES !!!

CPA License received 10/2012 !!
CFE License received 04/2013 !!
EA License received

Givemesleep

[Anonymous]

I'm going to say this one…

The fact that the audit committee reviews decisions about promotions of the chief internal auditior

b/c the fact that the internal auditor reports directly to the same committee as the external auditor would likely strengthen their objectivity.

[Givemesleep]

I was thinking that since the internal auditor used to work for the external auditor, he/she might skew the objectivity, just not sure and i found different answers in the material. Any others want to chime in?

Reg 11/15/2011 - 80
Aud 02/28/2012 - 81
Bec 05/31/2012 - 78
Far 08/31/2012 - 83 Do you believe in Miracles, YES !!!

CPA License received 10/2012 !!
CFE License received 04/2013 !!
EA License received

Givemesleep

[jeff]

The fact that the audit committee reviews decisions about promotions of the chief internal auditior

…

You want them reporting to the Audit Committee – not management.

Jeff Elliott, CPA (KS) | Another71 | NINJA CPA | NINJA CMA | NINJA CPE

[kmwgrace]

Yep that would be my answer too.

~ Kate... MTX!
CPA exam on hold while I homeschool my 6 year old!

[shiggity80]

I would think the fact that he worked for an independent CPA firm affects his competency while the other one deals sort of with who the IA reports to. The reporting structure relates to objectivity.

Someone correct me if I'm wrong here.

FAR: 87
AUD: 86
BEC: 86
REG: 84! Officially Done!

[Givemesleep]

Makes sense now, thanks.

Reg 11/15/2011 - 80
Aud 02/28/2012 - 81
Bec 05/31/2012 - 78
Far 08/31/2012 - 83 Do you believe in Miracles, YES !!!

CPA License received 10/2012 !!
CFE License received 04/2013 !!
EA License received

Givemesleep

[katiekanton]

To me, the question is asking about which situation has a greater NEGATIVE effect. I get that someone could read the question as “which will keep the auditor in line more” and in that case reporting to the audit committee is correct, but it seems to be to be asking which has the potential to skew his judgment.

AUD - 88
FAR - 90
REG - 85
BEC - 88

[Anonymous]

@katie – when I first read the question, that's what I thought, too. The AICPA just loves playing tricks with us. They like to obscurely word questions instead of just flat out asking the question they want us to answer. I think part of what makes the CPA exam so difficult is you not only have to come up with the correct answer, but you also have to correctly interpret what they are even asking you to answer in the first place.

[Author]

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