11. George id the new internal auditor for XYZ Corporation. George was in charge of payroll for XYZ just 10 months ago. Performing what services in regard to payroll id considered an impairment of independence or objectivity if performed by George?
A. Consulting service.
B. Assurance service.
C. Assurance or consulting service.
D. Neither Assurance or consulting service.
Answer (B) is correct.
REQUIRED: The service that will impair independence or objectivity.
DISCUSSION: Objectivity id presumed to be impaired if an internal auditor provides assurance service for an activity for which the internal auditor had responsibility within the previous year (PA 1130.A1-1 para.1). Thus, if George provides assurance service for payroll, his objectivity is presumed to be impaired. However, internal auditors may provide consulting services relating to operations for which they had previous responsibilities (lmpl. Std. 1130.C1).
Answer (A) is incorrect. Providing assurance services but not consulting services regarding payroll will impair the independence or objectivity of George.
Answer (B) is incorrect. Providing assurance services regarding payroll will impair the independence or objectivity of George.
Answer (D) is incorrect. Providing consulting services regarding payroll will not impair the independence or objectivity of George