This question is placed within the text (Case Study 17.6: Internal audit at Troston plc). Internal audit

This question is placed within the text (Case Study 17.6: Internal audit at Troston plc).

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Internal audit at Troston plc CASE STUDY 17.6 The company is already known to you from Activity 8.8 in Chapter 8. We set out below details of the company's internal audit department. Staffing Head of internal audit, John Hazely, is an ICAEW member and has been head of department for some five years. Prior to that he had been with a number of other depart- ments in the company, including accounting and finance. He has five staff members in his department: Andrew Howgill, a recently qualified member of the ACCA who joined the company three months previously. Janet Greensett, a computer expert who has been in the department for some five years. She has been called on by Troston to give advice to the IT com- mittee in respect of new developments and significant changes to existing computer applications. Alex Gayle and Derek Carlton, two experienced but professionally unqualified auditors, members of the department for some eight years. Anthony Newby, a graduate of a North of England university, two years with the company and one year with internal audit. He is shortly to join the produc- tion control department as assistant to the head of that department. He is to be replaced by a recently appointed graduate, Richard Watson. ago and comprises three non-executive directors, all of whom are executive directors of other companies. It is normal practice for members of the audit committee to meet the head of internal audit and other audit staff to discuss reports that they believe are of particular impor- tance. The position in the organization of internal audit is shown in Figure 17.2. Audit task as planned For the year to 30 June 2018 the internal audit head has drawn up the following broad plan. (In practice, the plan would be detailed, showing allocation of work to indi- vidual staff members and the dates on which the work would be performed.) Accounting and finance (a) production wages (b) sales and related trade receivables (c) purchase and related trade payables (d) non-current assets and depreciation. Production (at request of production director) (a) efficiency of the production process (b) appropriateness of allocation of production costs to products (c) effectiveness of production control department. Computer operations (a) review of systems, with particular attention to completeness and adequacy of documentation of new developments