In which of the following situations does the auditor potentially lack objectivity?
a) an auditor reviews the procedures for a new electronic data interchange connection to a major customer before it is implemented
b) a payroll accounting employee assists an auditor in verifying the physical inventory of small motors
c) an auditor discusses a significant issued with the vice president to whom the auditee reports prior to drafting the audit report
d) an auditor recommends standards of control and performance measures for a contract with a service organization for the processing of payroll and employee benefits
e) a former purchasing assistant performs a review of internal controls over purchasing seven months after being transferred to the internal auditing department
Answer: e) a former purchasing assistant performs a review of internal controls over purchasing seven months after being transferred to the internal auditing department
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Which of the following is not a disadvantage of an HMO plan versus a PPO plan?
A) The HMO plan may be less expensive. B) The HMO plan is more restrictive on which doctors the patient is able to use. C) The HMO plan often requires a referral in order to see a specialist. D) The HMO plan is generally more expensive for the same level of coverage.