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13.20 (40 marks 48 minutes) You are a member of the audit team working on the 30 June 2021 audit of Smug- glers (Pty) Ltd,
13.20 (40 marks 48 minutes) You are a member of the audit team working on the 30 June 2021 audit of Smug- glers (Pty) Ltd, an export/import company. Borders Ltd holds 70%% of Smugglers (Pty) Ltd's capital whilst other companies in the group are Guards (Pty) Ltd, which is 100% held by Borders Ltd, and Contraband (Pty) Ltd which is 60% held by Smugglers (Pty) Ltd. The remaining shares in Smugglers (Pty) Ltd are held by 11 private investors. Of the four companies within the group, you hold only the audit appointment of Smugglers (Pty) Ltd, the three remaining companies being audited by other firms. Borders Itd purchased 30%% of its shares in Guards (Pty) Lid on 31 October 2020. Prior to this, it already owned 70%% of the shares. Your permanent audit file revealed the following: 1. Directors of : Borders Lid Billy Kidd Roy Rogers Davy Crockett Horst Trigger : Smugglers (Pty) Lid JT Edson Louis L'amour Bill Ocean : Contraband (Pty) Lod Roy Rogers Willy Nelson : Guards (Pty) Ltd Bill Haley Chuck Berry You have been assigned to the audit of statutory matters and, as part of your proced- ures, have extracted the following matters for consideration: 1. A loan of R.2,5 million made by Smugglers (Pty) Led to Borders Ltd. Borders Itd has used the money to pay the shareholders of Guards (Pty) Lid for the shares acquired in October 2020. The loan was adequately secured and subject to market related terms
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