Professional Documents
Culture Documents
Problem (Objective 20-5) Alyssa Ghose Is Auditing Payroll Accruals For A Manufacturing Company. The Client
Problem (Objective 20-5) Alyssa Ghose Is Auditing Payroll Accruals For A Manufacturing Company. The Client
(Objective 20-5) Alyssa Ghose is auditing payroll accruals for a manufacturing company. The client
has accrued payroll taxes, accrued vacation pay, and accrued bonuses for salespersons as of the end
of the fiscal year. Alyssa performed the following audit procedures.
1. Compared all accrual balances in the current year to the prior year and noted no significant
fluctuations.
2. Traced the subsequent payment of payroll taxes to the cash disbursements journal and the bank
statement.
4. Reviewed cancelled checks for a sample of checks disbursed after year end for unused vacation
pay.
a. Are the audit procedures performed by Alyssa sufficient to test accrued payroll tax, vacation pay,
and bonuses? If not, what additional procedures should she perform?
b. For each additional procedure you recommend in part a., identify the related audit objective the
procedure would satisfy.
Design and perform analytical procedures for the payroll and personnel cycle.
Objective 20-5
Design and perform tests of details of balances for accounts in the payroll and personnel cycle.
Step-by-step solution
1. Step 1 of 2
a.
Here, company policy regarding payroll computing and recording vacation pay accrual, payroll tax
examination, and accrued bonus did not examined properly. Thus, the audit procedures performed
by the auditor is not appropriate.
Comment
2. Step 2 of 2
b.
The following table shows the additional procedures for each of procedures to be followed by the
auditors, and related audit objective:
This study source was downloaded by 100000802062280 from CourseHero.com on 01-03-2022 18:34:52 GMT -06:00
https://www.coursehero.com/file/75319772/20-26docx/
Additional Procedures Audit Objective
Comment
This study source was downloaded by 100000802062280 from CourseHero.com on 01-03-2022 18:34:52 GMT -06:00
https://www.coursehero.com/file/75319772/20-26docx/
Powered by TCPDF (www.tcpdf.org)