a) The organization has introduced an internal audit department in the second quarter of the year. The section consists of three staff. The chief internal auditor is a former “Big 6” audit manager with 10 years’ experience in the profession. He has no internal audit experience. He reports direct to the manager director. Since joining the firm he has spent most of his time examining the internal control systems of the company. He is assisted by one new graduate and another person who has two years of internal audit experience and is presently in his third year part time commerce degree.
b) There were neither major disposals nor additions to fixed assets during the period. Fixed assets are not material and consist mainly of furniture and fittings.
Required:
Assume you are responsible for constructing an audit plan in each of the situations discussed above. Include reference to the nature and /or extent of audit evidence to be collected.