Question
Attached are several audit procedures used for the audit of payroll. REQUIRED: For each procedure attached, indicate the following. (1) Is the test primarily a
Attached are several audit procedures used for the audit of payroll.
REQUIRED: For each procedure attached, indicate the following.
(1) Is the test primarily a test of controls or substantive test of transactions?
(2) The primary management assertion being tested by the procedure (indicate only one).
(3) The type of evidence gathered in performing the procedure.
Format your answer in the following manner on your answer sheet.
Procedure | Control or Substantive Test | Management Assertion Tested |
Type of Evidence |
(a) |
|
|
|
Use the attached list of types of audit evidence in preparing your answer.
| AUDIT PROCEDURES FOR AUDIT OF PAYROLL |
(a) | The auditor watches the employees clocking in for various shifts. |
(b) | A sample of employees is selected from the payroll master file and information in the master file is compared to information contained in the personnel files of the employees for discrepancies. |
(c) | A sample of employees is selected from payroll registers from various dates during the year. The auditor recalculates gross pay, deductions, and net pay to determine the accuracy of the information on the reports. |
(d) | A sample of time cards from various payroll dates throughout the year is selected and reviewed for approval by appropriate supervisors. |
(e) | A sample of payroll registers are selected from various dates during the year. The auditor traces the totals on the payroll registers for gross pay, deductions, and net pay to the corresponding general ledger entries. |
(f) | Read the minutes of the board of directors meetings to determine if any changes have been made to stock option and stock ownership plans. |
TYPES OF AUDIT EVIDENCE | |
( 1) | Inspection of Documents--Tracing |
( 2) | Inspection of Documents--Vouching |
( 3) | Inspection of Documents--Scanning |
( 4) | Physical Inspection |
( 5) | Observation |
( 6) | Inquiry |
( 7) | Confirmation |
( 8) | Recalculation |
( 9) | Reperformance |
(10) | Analytical Procedures |
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