Tick & Co. are auditors of Pen & Paper ple (P&P), a chain of 32 stationery shops located throughout the UK, and is currently planning the 19X7 audit.

The management of P&P has made it clear that it expects the audit fee to be lower than it was in 19X6, and the audit partner and manager are currently planning the audit work with a view to meeting the client’s expectations while obtaining adequate audit assurance...............

QUESTIONS FOR DISCUSSION
1. What information do Tick & Co. need before they decide how to use the internal audit department? What are the underlying principles they need to bear in mind? What problems, if any, do you foresee?
2. How useful is the work of the internal audit department likely to be to the external auditors this year? How might it be made more useful?
3. Comment on Norman Wright’s assertion that the internal audit department will in future do work previously done by the external auditors.