Blackford Ltd is a company engaged in two diverse activities: manufacture of lawnmowers and trading in the hardware sector, selling its lawnmowers through its own hardware outlets. The company decided to discontinue its loss making lawnmower operation from 31 May 2020 (one month before year end date). Many people in the workforce were accepted for transfer to the hardware sector, but others are taking early retirement and accepting redundancy payments.

Redundancy payments are based on length of service and wage/salary levels in the last year of service, provided the employee has been at least two years with the company. The company has provided for redundancy costs of £200 000. Identify management assertions and suggest audit steps you would perform to satisfy yourself that the provision for redundancy cost is accurate.