Examine owner approval of rates of pay and withholdings Examine evidence that payroll hours and wage rates are verified by an independent person. Select a sample of 40 entries in the payroll journal and trace each to an approved time record. Compute payroll tax expense as a percentage of total wages, salaries, and commissions. Scan journals for all periods for unusual transactions to determine whether they are recorded correctly. Use audit software to account for the numerical sequence of cancelled payroll checks. Select a sample of 20 payroll payments and trace to payroll journal entries for name, date, and amounts. Obtain a schedule of all payroll liabilities and trace to the general ledger. Discuss with management any payroll liabilities recorded in the prior year that are not provided for in the current period. Review board of director meeting minutes to verify the salary for the chief executive officer