Tukai is a listed limited-liability company with a year-end of 30 June. Tukai's main activity is selling health products to the public. Products sold range from soap, perfume and herbal supplements. Products are purchased from approximately 100 different suppliers around Asian countries. Tukai has 20 stores in 5 different countries.

Tukai is managed by Karl Kalulu who is an accountant with CPA from Australia and with his influence has a well-trained staffed internal audit department, who report on a regular basis to the audit committee. Karl has impressed the owners of the company with his professional reports and timely external audits.

Areas where the internal and external auditors may carry out work include:

-attending the year-end inventory count in 20 stores annually. All stores are visited on a rotational basis

-checking the internal controls over the procurement systems (e.g. ensuring a liability is only recorded when the inventory has been received)

-reviewing the operations of the marketing department. Required: For each of the above three areas, discuss:

(a)  the objectives of the internal auditor

(b) the objectives of the external auditor

(c)  whether the external auditor will rely on the internal auditor and, if reliance is required, the extent of that reliance.