At the audit planning meeting for the year ended 28 February 20X4 with the finance director

of Malbec Sdn Bhd, you ascertained that payroll processing, which had been outsourced for a

number of years, was brought back in-house in December 20X3. Management was not satisfied

with the performance of the service provider and rejected the contract. The service provider had been responsible for making payments to the employees and the monthly remittances to ABC Bank. Two of Malbec Sdn Bhd's accounts clerks have been trained in payroll processing.

Requirement:

Identify the audit risks in respect of the above matter for the year ended 28 February 20X4 and

state how you would address these risks.