Linda is assigned to audit some items in the financial statements for Work Hard Sdn Bhd for the year ended 31 August 2020. She has discoverred the following information:

1. Client companys cash account balance and its bank account balance have shown different figures. The company has prepared a bank reconciliation statement for the month ended 31 August 2020.
2. Linda has been told by the companys management that there are few cheques outstanding which were issued in July 2020 to pay for some expenses. There is no other issue with the bank reconciliation items.
3. The company has 1000 workers who are paid weekly. The payroll function has not been operating smoothly for some time. Errors often reported where workers received pay cheques for an amount considerably larger than they should have. Further investigation revealed that the mistake was due to wrong number of hours worked reported.
4. In other instance, a computer operator has purposely included a pay rate increase for one of his friends in the factory. This was discovered by chance by another employee.
5. There were also cases of missed payments to workers. They were not detected until the pay cheques for that department were distributed by the supervisors.

Required:

I) Suggest substantive test that Linda can perform for item (a) dan (b).

(6 Markah/Marks) II) Identify the related assertions in item (c) to (e).

(3 Markah/Marks)

III) State one (1) control that should have prevented each item (c) to (e) from occurring on a continuing basis; and

3. Markah/Marks)

IV) State one (1) substantive audit procedure that could uncover the misstatements in each item (c) to (e).

4. Markah/Marks)