Question

In: Accounting

Assume you are the senior accountant on an audit engagement of a fictitious business, Pine Street...

Assume you are the senior accountant on an audit engagement of a fictitious business, Pine Street Company (PSC). Assume the instructor is the engagement partner. You are to prepare an audit program for PSC. The firm manufactures and sells bicycles. The audit program must be in one of the following areas of the business: accounts receivable and revenues; inventories and costs of goods sold; accounts payable; payroll; or property, plant and equipment.

Identify the components/sections of a cash audit program for PSC. Please no cursive.

Solutions

Expert Solution

Audit Programme for Payroll

Aspect to be Verified by Auditor

(Tick) if Done

Remarks

Preparatory

Understand the HR function prevalent in the enterprise

Is there a computerised system for payroll functions

Attendance of Employees

Obtain payroll register / attendance details

How is attendance updated?

Is there a biometric system to record time - in and time-out?

Are the leave days taken by employees properly taken into account for salary calculations?

Computation

Obtain salary calculations

Are the statutory deductions like Provident fund, medical insurance, other funds properly calculated and deducted?

Check the salary computation statements given

Payment of Salary

Are the salary credits made to employees' bank accounts?

Who authorizes salary payments? Is there proper control?

Are the pay slips/ vouchers are signed by employees?

Accounting

Is the payment of salary properly accounted?

Compare the accounting entries with computations

ekkarill92 answered 2 years ago
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