The October 16, 1995, issue of Fortune discusses the outsourcing relationship between Saks Fifth Avenue and Deloitte & Touche LLP: Deloitte & Touche provides the internal audit function for Saks. Such relationships are no longer unusual. Use library resources or personal interviews to help answer the follow¬ ing questions.

a. Other than cost savings, what benefits can be gained by outsourcing the internal audit function to an external public accounting firm?

b. What, if any, ethical issues could arise if the CPA firm that performed the organizational audit also performed the internal audit work?

LO2