An audit trail enables a person to trace a source document to its ultimate effect on the financial statements or work back from amounts in the financial statements to source documents. Describe in detail the audit trail for the following:

a. Purchases of inventory b. Sales of inventory c. Employee payroll

2. Employees at the Dewey Construction Company enter the work they perform on jobtime tickets. Most construction sites have data input terminals that employees use to enter the time they start and stop work and the job code that represents the project they are working on. Every night the job-time ticket data for that day is sent electronically to company headquarters, where it is stored until payroll is processed.

A few construction sites are so remote that employees still fill out paper job-time tickets. These tickets are express mailed weekly to company headquarters, where they are scanned and processed.

Payroll is processed weekly. The job-time tickets are used to update the payroll database as well as the work-in-process database. Since all employees are paid electronically, no checks are printed; instead, the payroll system deposits an employees net pay in the employees bank account. Payments are made to government tax bodies and the company handling the employees and the companys 401K plan contributions. All disbursements are accompanied by a report summarizing the disbursement. The system also produces pay stub data that is stored in a payroll transaction file that is accessible to employees over the internet. An electronic summary payroll report is created and sent to the payroll supervisor.

REQUIRED

a. Prepare a system flowchart for Dewey Construction Companys payroll processing. b. Prepare a BPD for Dewey Construction Companys payroll processing.