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Payroll & Personnel Cycle - Coggle Diagram
Payroll & Personnel Cycle
Objective: to evaluate whether the account balances affected by the cycle are fairly stated in accordance with GAAP.
Audit Objectives:
ACCURACY
&
CUTOFF
Accounts
Accrued wages, salaries, bonuses and commissions
Direct Labour Accounts
Withheld income taxes and other deductions
Accrued payroll tax expense
Payroll tax expense
Cash in banks
Documents related to payroll
Personnel records
Deduction authorization form
Rate authorization forms
Payroll master files
Methodology for designing controls and substantive tests
Understand Internal Control
Assess Planned Control Risks.
Determine the extents of test of controls.
Design test of controls and substantive test of transactions.
Test of Details of Balances
Liability Accounts:
Accrued salaries & wages
Accrued commissions
Accrued payroll taxes
Expense Accounts:
Commissions
Payroll tax expense
Total payroll
Analytical Procedures
Compare payroll expense account balances with previous years.
Compare Direct Labour as a percentage of sales with previous year.
Compare commission expense as a % of sales with previous years.
Compare payroll tax expense as a % of salaries and wages with previous years.
Compare accrued payroll tax accounts with prior years