Answer Happy

You are planning the audit of Thabo Ltd, a company that
specializes in spare parts retailing that are targeted to sport
cars. The company has a number of employees that totals 40
employees. The company is located in South East Asia.
You have discovered that some employees are being paid using
cash at the end of each week. Some employees who are supervisors to
the junior employees are paid via cheques at the end of 2every 2
weeks and the managers are paid straight to their account at the
end of the month.
Terry is responsible for paying all the employees of Thabo as
well as keeping the employee records and entering the leavers and
joiners into the system. No-one reviews what Terry does.
Required
Identify and explain the audit risks relating to the
external audit of Thabo Ltd. Where possible, your answer should
refer to specific items in the financial statements which may be at
risk of misstatement.