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

Required

a. Explain why the first-year auditor’s suggestion may or may not be appropriate and outline what work is required.

b. Explain the concept of bench-marking. Why is it appropriate for an auditor to use a bench marking audit strategy that uses information from tests of controls performed in prior years?