During a discussion with the audit committee, the chair of the audit committee raised questions about the company’s waste disposal processes. After the discussion, the area was identified as one of potential high risk and therefore identified as a high priority for the internal audit department. The company has manufacturing plants in nine states. The audit committee’s concerns are limited to the disposal of chemical waste products.

Required

a. What information should the auditor gather in planning the audit engagement? For each major piece of information, indicate the source. Organize your answer as follows:

Information Needed Source of Information

b. Write an operational audit program to conduct the audit. If you need to make assumptions about company policies or procedures, state those assumptions in formulating the audit program.