Question

michael was on the abc accounting firm's audit team for the rasmussen corporation audit. rasmussen's officers were so impressed with michael that they offered him a job as director of internal audit at rasmussen. what should michael do in order to preserve independence?

Answer 1

In order to preserve independence, Michael must "Remove himself from the engagement as he considers the offer." (Option B). It is to be noted that this is an internal control problem.

What is Independence in this case?

The absence of situations that jeopardize the internal audit activity's capacity to carry out internal audit tasks objectively is called Independence.

Practically, independence is achieved by ensuring that the internal audit activity has no management control for any of the organization's non-audit functions that are subject to internal audit assessments, and by distancing the internal audit activity's management from the functional oversight of the organization's senior management.

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Full Question:

Michael was on the ABC Accounting Firm's audit team for the Rasmussen Corporation audit. Rasmussen's officers were so impressed with Michael that they offered him a job as Director of Internal Audit at Rasmussen. What should Michael do in order to preserve independence?

A) Tell his superiors as soon as he has decided whether or not to accept the offer.

B) Remove himself from the engagement as he considers the offer.

C) Pray for divine guidance.

D) If he decides to reject the offer, remove himself permanently from the engagement.