Question 2 [50] You are the auditor of Mlilo Ltd, an electric appliance manufacturer. The company employs 400 workers and 20 foremen working within 4 departments. Each department has a factory administration clerk who is responsible for its wages. The wage week runs from Friday to Thursday. Waged employees are paid every Friday based on the hours worked. The junior audit clerk has prepared the following draft working papers as discussion document for you. Working Paper 1 - Payroll Controls 1 2 3 I have noted that controls over human resources are in place. These controls have been assessed as being sound. Each department keeps time records by having any one of the foremen in that department sitting at the four entrances to the factory (one for each department) and ticking off employees on the attendance register as they enter. Employees must present identification cards which contains the employee's number, name and photo when entering. The foremen look at the identification card and place a tick in the column for entry for that particular day. At the end of the day the same process is followed, and a tick is made in the exit column for that day. Each employee is credited with 8 hours a day for two ticks, one in the entry and one in the exit column. If employees arrive late or have to leave early, they must report to the foremen who record the time of arrival or exit. Any overtime worked is added to an employee's hours by the foreman in a separate column on the attendance register. The factory administration clerks collect the attendance registers for their department early on Friday mornings, calculate the hours worked for each employee and hand them to the wage clerks for processing.