The audit fee disclosed for Cable & Wireless pic was £ 1.7 million in its 1997 accounts.

(a) Discuss how many man-days of audit time you think would be reasonable to audit an industrial company where:

(i) the sales were £7,002 million;

(ii) the fixed assets were £6,442 million;

(iii) the current assets were £3,225 million; and

(iv) there were 37,448 staff in Hong Kong, the UK, Continental Europe, North America, the Caribbean and the rest of the world.

(b) Discuss the suggestion that audit fees are inadequate.

LO31-3