The Audit Committee of a small manufacturing company that sells its products globally has directed internal audit to perform specific annual reviews to monitor manual journal entries, with a particular focus on potential management override activities. Internal audit’s review includes basic information such as the number, dollar amount, preparer, business unit, and timing relative to month- and quarter- end.

Required:
a. What specific issues should the internal auditor be concerned about with respect to individual entries?
b. Could the external auditor rely on the internal audit’s work related to manual journal entries to reduce control risk?