MELISSA CATHLIN - 01220110072

CHAPTER 21
Personnel and Employment
Personnel records
Deduction authorization form
Rate authorization form
Time keeping and payroll preparation
Time card
o! time ticket
Payroll transaction file
Payroll "ournal
Payroll master file # A payroll master file is used for recording each payroll transaction
for each employee and maintaining total employee $ages paid for the year to date%
Payment of payroll
Payroll check
Payroll !ank account reconciliation
Preparation of Payroll Ta& Returns and Payment of Ta&es
'(2 )orm
Payroll ta& returns
*ethodology for Designing Controls and +u!stanti,e Tests
-nderstand internal control . payroll and personnel
Ade/uate separation of duties
Proper authorization
Ade/uate documents and records
Physical control o,er assets and records
0ndependent checks on performance
Assess planned control risk . payroll and personnel
Determine e&tent of testing controls
Design tests of controls and su!stanti,e tests of transactions for payroll and
personnel to meet transaction(related audit o!"ecti,es#
Audit procedures
+ample size
0tems to select
Timing
Payroll Ta& )orms and Payments
Timely payment of the payroll ta&es $ithheld and other $ithholdings
Preparation of payroll ta& forms
0n,entory and )raudulent Payroll Considerations
Tests for none&istent employees
Relationship !et$een payroll and in,entory ,aluation
*ethodology for Designing Tests of 1alances for Payroll 2ia!ilities
Phase 0 #
MELISSA CATHLIN - 01220110072
0dentify client !usiness risks affecting payroll lia!ility accounts
+et tolera!le misstatement and assess inherent risk for payroll lia!ility
accounts
Assess control risk for the payroll and personnel cycle
Phase 00#
Design and perform tests of controls and su!stanti,e tests of transactions
for he payroll and personnel cycle
Phase 000#
Design and perform analytical procedures for the payroll and personnel
cycle
Design tests of details of payroll accounts !alances to satisfy !alance(
related audit o!"ecti,es# audit procedure3 sample size3 item to select3
timing%
T$o *a"or 1alance(related Audit 4!"ecti,es
Accruals in the trial !alance are stated at the correct amounts 5accuracy6%
Transactions in the payroll and personnel cycle are recorded in the proper period
5cutoff6%
Tests of Details of 1alances for 2ia!ility Accounts
Amounts $ithheld from employees7 pay
Accrued salaries and $ages
Accrued commissions
Accrued !onuses
Accrued ,acation pay3 sick pay3 or other !enefits
Accrued payroll ta&es
Tests of Details of 1alances for E&pense Accounts
4fficers7 compensation
Commissions
Payroll ta& e&pense
Total payroll
Contract la!or
Presentation and Disclosure 4!"ecti,es
Re/uired disclosures are not e&tensi,e
+ome comple& transactions re/uire footnote disclosure