The chief audit executive (CAE) is reviewing the engagement work programme of an upcoming internal audit engagement produced by an inexperienced internal auditor. Compiling the engagement work programme forms part of the planning phase of the audit. The work programme is supposed to set out the engagement (audit) procedures which should be executed during the performance phase of the audit. As every properly formulated engagement procedure is supposed to consist of three (3) parts, the CAE knows that the engagements procedures contained in the work programme are not fully and properly formulated as it only consist of two (2) parts (as depicted by "column 1" and "column 2" in the table here below).

Among the items contained in the working papers is a description of an item of physical information.The following engagement procedures (A. - D.) are extracts from the work programme:

LETTER COLUMN 1 COLUMN 2 A. Computing variances B. Observing conditions C. Interviewing people D. Examining records

YOU ARE REQUIRED TO:

i.) Determine which one of the engagement procedures above (A. - D.) will be the most suitablesource for the description of an item of physical information to be documented in theworking papers during the performance phase of the audit.

ii.) Provide a full description of the part of a properly worded/formulated engagementprocedure which is presented by the words in "column 1" of the table here above.

iii.) Provide a full description of the part of a properly worded/formulated engagementprocedure which is presented by the words in "column 2" of the table here above.

iv.) Provide a full description of the part of a properly worded/formulated engagementprocedure which is missing (thus the missing third column) in the table here above.