Question 2

You are the audit senior at Mills & Co and are asked to supervise the finalisation of the audit for Cardinal Co (Cardinal) which is a company that runs a chain of restaurants across Europe. They employ roughly 600 staff and have a 30 June year-end.

The staff at Cardinal restaurants work a fixed, core number of hours per week as outlined in their contract of employment. At busy times staff can be asked to work additional hours as overtime which is paid at 30% premium over and above their regular pay rate. Annual pay rises are usually in line with inflation and are implemented from 1 July each year.

Overtime is recorded manually on timesheets and authorised by the employees line manager. Deductions such as tax, national insurance and pension contributions are calculated automatically on the computerised payroll system.

Employees are paid monthly for both their core hours and any overtime worked in the previous month. The payroll package links automatically to the bank system to automate payments. Required

a) Describe five audit procedures that should be performed at the final audit to ensure that the payroll expense is accurate and complete. (15 marks)