Question
QUESTION ONE [50] You have recently been placed in charge of the audit of Hobnob (Pty) Ltd as a result of the resignation of
QUESTION ONE [50] You have recently been placed in charge of the audit of Hobnob (Pty) Ltd as a result of the resignation of one of your colleagues. Hobnob (Pty) Ltd is a large manufacturer of fashion garments and accessories. Up until the present time (end of February), no work has been done on the audit for the current financial year. The company has manufacturing plants in Nelspruit, Durban and Cape Town and employs large numbers of hourly paid workers at all three plants. Each plant has a number of cost centers, e.g. cutting, trimming and stitching and wage costs are allocated to these cost centers. While gathering knowledge of this client, you obtained the following analysis of wages paid for the first nine months of the financial year-end 30 April 2022 from the financial manager of Hobnob (Pty) Ltd: Acc no. Acc name Total Durban Cape Town Nelspruit 1023 Wages 843 271 268 752 428 816 145 703 1024 Casual Wages 14 424 7 925 4 693 1806 1025 Other 128 714 128 714 986 409 276 677 433 509 276 223 On enquiry of the managing director, concerning account 1025 "Other", he informs you that the balance on the account reflects wages paid to illegal immigrants from Mozambique. He informs you further that:
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