You are the manager of internal audit for a large financial institution that uses advanced computer systems: distributed systems, online real-time update systems, database management systems, and so on. The top managers of your company have decided that computer operations are sufficiently material that it is worthwhile employing a full-time person with expertise in computer performance evaluation. This person will be responsible for setting up and carrying out a program of regular performance reviews of all major information systems within your company.

The top managers recognize that the person responsible for performance evaluations at times will be in a position to breach the integrity of systems. They are concerned that the powers vested in the person not be abused. They are concerned, also, about the impact of this person's activities on the conduct of the external audit.

Required: The top managers ask you to write a brief report recommending some controls that might be implemented and exercised over the person to ensure proper performance of duties. In addition, they ask you to advise them on any changes they should expect to the work undertaken by your company's external auditors in light of their appointing a person to un-

dertake performance evaluation of the company's major systems. In particular, they are interested in whether the external auditors are likely to increase or decrease the extent of the audit work they undertake.