Certified Government Auditing Professional (CGAP) Practice Exam

What is the best approach when an auditor has personal connections with a research laboratory being audited under GAGAS?

1. Auditors are entitled to their views; no standards are violated

2. No financial interest means assignment is acceptable

3. Preconceived views may bias the audit and violate independence

4. Healthy skepticism indicates beneficial perspectives in audits

The correct answer is: Preconceived views may bias the audit and violate independence

When an auditor has personal connections with a research laboratory being audited under GAGAS (Generally Accepted Government Auditing Standards), the best approach is to recognize that preconceived views may bias the audit and violate independence. Maintaining independence is a foundational principle in auditing, particularly in the context of government auditing, where public trust is paramount. Personal connections can cloud an auditor’s judgment, leading to potential bias in assessments and decisions. This bias not only impacts the objectivity of the audit but can also undermine the credibility of the audit findings. Independence ensures that auditors can provide an unbiased and fair evaluation of the entity being audited. When personal relationships are involved, there is a substantial risk that the auditor’s perspective may be affected by those ties, resulting in a conflict of interest. The other options do not adequately address the risks to independence associated with personal connections. They either downplay the importance of bias in auditing or mistakenly conclude that a lack of financial interest makes the auditor’s relationship acceptable. Thus, recognizing the potential for bias and the necessity for independence is crucial for an effective and credible audit process.