Question

In: Accounting

COUNTRY: USA!! For the following liability accounts, propose a substantive audit procedure (either an analytical test...

COUNTRY: USA!!

For the following liability accounts, propose a substantive audit procedure (either an analytical test or a test of details) to test the year end balance of the following various liability accounts listed below. As an example - to audit the liability account mortgage interest payable at year-end, you would check to see when the last interest payment was, and then based upon the loan balance and interest rate and the number of days to year-end, you could compute an interest payable amount. Alternately, you could take the amount of mortgage interest expense for the year and divide by 12. That should be the maximum mortgage interest payable at year end. Here are the 5 liability accounts I would like you to propose audit procedures for:

1. Sales tax payable

2. Accrued wages

3. Accrued employer match for medicare/social security payroll taxes

4. Accrued employee portion of payroll taxes, including income tax withheld.

5. Utilities payable

BE SPECIFIC and descriptive about the audit procedures you propose.

Here is some additional information that you will need:

Sales tax is paid monthly.

Payroll is paid every two weeks.

The last payroll paid covered the two weeks ending 12/24, and was paid on 12/31.

Payroll taxes associated with the 12/31 payroll will be paid the first week of January.

As auditor, you have access to completed payroll records and government payroll tax form filings. Please note: you CANNOT suggest a review of subsequent payment of these liabilities.

PLEASE DO ALL, WILL GIVE A THUMBS UP! :)

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