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(SAPP) AA Revision - Substantive Procedures Payroll

The document outlines a revision audit procedure for payroll systems, detailing various substantive procedures auditors should perform. Activities include analytical comparisons, sampling employee records, and verifying payroll calculations to ensure accuracy and validity of payments. Each activity is allocated marks based on the correct action and objective of the audit.

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21 views1 page

(SAPP) AA Revision - Substantive Procedures Payroll

The document outlines a revision audit procedure for payroll systems, detailing various substantive procedures auditors should perform. Activities include analytical comparisons, sampling employee records, and verifying payroll calculations to ensure accuracy and validity of payments. Each activity is allocated marks based on the correct action and objective of the audit.

Uploaded by

Con Tác Giả
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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REVISION AUDIT PROCEDURE THEORY

Marks will be allocated:


• 0.5 marks to activity performed by auditor (correct action verb and correct audit evidence)
• 0.5 marks to objective of activity

Section Substantive procedures Guidance

Payroll system  Perform analytical procedures such as proof in total by using number of employees
and average wage and investigate any significant fluctuation.
 Carry out month by month comparisons of total wages with prior year/budgets and
investigate differences.
 Select a sample of employees from the payroll and agree hours paid to individual clock
cards to ensure that employees are only paid for work done.
 Select a sample of employees from the payroll and vouch to individual contracts of
employment in HR department to ensure that wages are only paid to valid employees.
 Compare overtime costs each month with the prior year and investigate significant
variances to ensure that overtime paid is for additional hours required by the business.
 Obtain printout of employee wage rates and compare to HR records to ensure wages
are paid at the correct rates of pay.
 Select a sample of employees and reperform calculations of gross and net pay to
ensure that errors do not occur in payroll calculations.
 Agree total wages and deductions per selected payrolls to the amounts recorded in
the individual general (nominal) ledger accounts to ensure the accuracy of the payroll
amounts.
 Agree sundry payables for tax outstanding at the year end to the payroll records and
check subsequent payment to cash book to ensure the accuracy of the payroll records.

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