Question
The following are steps in the methodology for designing tests of controls, substantive tests of transactions, and tests of details of balances for the payroll
The following are steps in the methodology for designing tests of controls, substantive tests of transactions, and tests of details of balances for the payroll and personnel cycle (not in the correct order): - Design tests of details of balances for the payroll and personnel cycle. - Evaluate risk and materiality for payroll expense and liability accounts. - Evaluate the costbenefit of assessing control risk as low for payroll. - Design and perform payroll and personnelrelated analytical procedures. - Identify controls and deficiencies in internal control for the payroll and personnel cycle. - Obtain an understanding of the payroll and personnel cycle internal controls. - Evaluate tests of controls and substantive tests of transactions results. - Design payroll and personnel cycle tests of controls and substantive tests of transactions. - Assess inherent risk for payrollrelated accounts. 1. Identify (1) those steps that are tests of controls or substantive tests of transactions and (2) those that are tests of details of balances. 2. Put steps that are tests of controls and substantive tests of transactions in the order of their performance in most audits. 3. Put the tests of details of balances in their proper order.
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