Jodam Manufacturing Company has approximately 1,000 production employees who are paid hourly wages. The internal auditors examined records maintained by the personnel department to determine the basis of deductions from payroll. They found that no system existed for the maintenance of current and proper payroll deduction authorizations in personnel files. In their sample of 50 employees, the auditors found six instances in which personnel files failed to contain proper payroll deduction authorizations signed by employees. The internal auditors promptly reported their findings. In response, the personnel manager had the six employees sign appropriate authorization forms for payroll deductions. He then reported to the internal auditors that he had thereby corrected the deficient condition.

Required:

a. Discuss the extent to which internal auditors are responsible for follow-up to determine that appropriate corrective action is taken by management on reported audit findings.

b. What criteria should the internal auditor consider in judging the propriety of corrective action?

c. Assess the adequacy of the personnel manager’s remedial actions according to the specified criteria. (Your discussion need not focus on specific control procedures.)