A manufacturing plant location was undergoing extensive construction. An internal auditor was requested to review the plant's security. The security supervisor explained that the area under construction was enclosed with a fence and that a special gate was installed for all of the contractors' employees' use. This gate was posted with a company guard. The guard was responsible for checking the badges of all of the people entering and leaving the area and for checking tool boxes, lunch boxes, and similar items that were being carried to and from the plant.

Upon observing the construction site, the auditor noticed that there were more contractors' employees in the plant than company employees. A staff of guards was assigned to the area in which company employees worked, but only one guard was assigned to the area under construction.

Required:

What control problems are likely to arise in this setting? How could the auditee effectively respond to such problems?