Question

  Persuasiveness of evidence from substantive analytical procedures Iman has the task of reviewing the evidence from substantive analytical procedures conducted by the audit associates on the audit of Smalley Services Inc. The audit associates have reported the results of these substantive analytical procedures:

1. 1. Comparison of depreciation expense with the closing balance of each depreciable asset class in property, plant, and equipment.
2. 2. Recalculation of sales commission expenses using the standard sales commission rate and total sales.
3. 3. Comparison of payroll expense with previous year payroll.

Can I get some help with this please

Answer 1

Answer:

Substantive analytical procedures:

• Comparison of devaluation cost with the closing balance of each depreciable resource class in property, plant, and gear.
• Depreciation rate – Auditor should survey./evaluate the sensibility of devaluation that entity gave to the gathering or class of benefits or assets.
• The rate ought to be steady to the limit that fixed resources could add to in the inflow .Audit ought to likewise evaluate the devaluation rate gave by the Tax authority
• Recalculate the deterioration costs – this ordinarily done by Auditor . Auditor regularly accommodate their number with Client number .
• Auditor likewise review aggregated deterioration sum that reports to Balance Sheet .
• Auditor likewise accommodate deterioration costs according to Income statement just as devaluation determined scheduled wise.

Substantive analytical procedures- Commission :-

• Sale commission typically calculated dependent on level of some type of sales accomplishment , Gross sales , new item income . Inspecting or Auditing the precision and trustworthiness with which an organization pays its commission according to strategy and method Auditor needs to comprehend figuring procedure of sales commission. Auditor needs to check calculation propriety and Accuracy .

Payroll Audit – Audit incorporates mostly guarantee precision Auditor needs to review following item :

• Dynamic workers , pay rates , compensation, tax with holdings.
• Auditor consistently audit that – No misrepresentation payment towards phantom worker. Need to investigate any manual blunder made into the framework . Need to recheck whether tax retaining calculate right way .
• Auditor ought to ensure employee recorded on organization payroll – a few workers submit payroll extortion by adding counterfeit workers to payroll or at some point neglected to expel a terminated worker from payroll document .
• Compromise or reconciliation of payroll number – Payroll records with General record.