McCarthy, CPA, was engaged to audit the financial statements of Kent Company, a continuing audit client. McCarthy
Question:
McCarthy, CPA, was engaged to audit the financial statements of Kent Company, a continuing audit client. McCarthy is about to audit Kent's payroll transactions. Kent uses an in-house payroll department to process payroll data and to prepare and distribute payroll checks. During the planning process, McCarthy determined that the inherent risk of overstatement of payroll expense is high. In addition, McCarthy obtained an understanding of internal control and set the control risk for payroll-related assertions at the maximum level. Required: Describe the audit procedures McCarthy should consider performing in the audit of Kent's payroll transactions to address the risk of overstate- ment. Do not discuss Kent's internal control. (AICPA, adapted) p-968
Step by Step Answer:
Auditing And Assurance Services A Systematic Approach
ISBN: 9780073337203
5th Edition
Authors: William Messier, Steven Glover, Douglas Prawitt