QUESTION $2(20$ Marks$)$

$2\mathrm{.}1.$ You are the audit senior of Blair & Co and your team has just completed the interim audit of Chuck

Industries Co$,$ whose year$-$end is $30$ June $2023.$ You are in the process of reviewing the systems testing

completed on the payroll cycle, as well as preparing the audit programmes for the final audit. Chuck

Industries Co manufactures lights and the manufacturing process is predominantly automated$$ however,

there is a workforce of $85$ employees, who monitor the machines, as well as approximately $50$ employees

who work in sales and administration. The company manufactures $24$ hours a day seven days a week.

Chuck Industries is considering establishing an internal audit $($IA$)$ department next year. The finance director

has asked whether the work performed by the IA department can be relied upon by Blair & Co$.$

Required:

Explain the factors that should be considered by an external auditor before reliance can be placed on the

work performed by a company$$s internal audit department.

$(6$ marks$)$

$2\mathrm{.}2.$ What factors should a group engagement partner consider before placing reliance on component

auditor?

$(3$ marks$)$

$2\mathrm{.}3.$ List and briefly explain the three pillars on which internal audit is centred on$?(6$ marks$)$

$2\mathrm{.}4.$ Described the objectivity of internal auditors within an organisation? $(5$ marks$)$