The junior auditor on the engagement has suggested that, since there were no exceptions detected in previous years, no work on internal controls is required because last year’s evidence will be sufficient. 

Required

Explain why the junior auditor’s suggestion is not appropriate and outline what work is required. Source: Adapted from the Institute of Chartered Accountants Australia’s CA Program’s Audit & Assurance Exam, March 2011. Provided courtesy of Chartered Accountants Australia and New Zealand.