Designing for iphone & ipad Question

I designed my app for the iPad (1024 x 768) resolution and am wondering if it is required by apple for my app to also fit onto an iPhone, as I notice in their app store most apps are offered on both iPad and iPhone.  I don't think my app would work well on the iPhone's small screen size as the assets would appear rather small…. can you advise if you automatically scale the iPad version to fit on an iPhone or if I need to create another version of my app for the iPhone so it would fit the smaller screen size and where necessary, "dumb" down the user experience by reducing the number of assets on screen so they are large enough to interact with?  Thanks for your thoughts and advice on how to handle this.