A large manufacturer of ladies’ clothing recently acquired three manufacturing subsidiaries. As the director of internal auditing, you plan to have members of your staff review the internal controls over finished goods inventories and inventory costing practices in each of the newly acquired subsidiaries. You recognize that the initial contact with the auditees will be important to facilitate conduct of the proposed audits.

Required:

Discuss five steps that you, as the director of internal auditing, would take to develop a cooperative atmosphere (participative approach) between the auditees and the internal auditors.