Independence Requirements Practice Test

A firm is engaged to perform a GAO audit of a state agency. The agency asks the auditor to determine which adjusting entries should be recorded and to post them directly into the general ledger before year-end close, because the accounting staff is short-handed. What is the most appropriate safeguard for this independence threat?

A CPA is performing a GAO audit of a county health department that receives federal grant funding. The audit manager’s spouse was hired midyear as the department’s controller and will oversee the preparation of the financial statements and respond to audit inquiries. Which factor indicates a threat to independence under GAO standards?