Rocky's Chicken Huts, Inc. is a growing, publicly owned chain of fast food outlets. Patrick McBride, president of the chain, has decided that the company is large enough to establish an internal auditing department. He has been told by the company's public accountants that the company needs internal auditors and that other similar organizations have rather extensive internal auditing operations. Mr. McBride is interviewing various people for the position of director of internal auditing for the company, and you are one of three candidates he has selected as the most promising. He has decided to make his selection based upon how each of the three candidates proposes to develop the internal auditing function in the company.

Required:

Write a concise but comprehensive outline of the principles you would use to develop the internal auditing function for Rocky's Chicken Huts, Inc. In your outline, include the general principles for directing the audit function through the organization, the nature of the auditing responsibility, the extent of that responsibility, the level of authority given internal auditing, and the nature of the relationships between the internal auditing function and other functions related to the company.