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Unit 5 - Summary - Coggle Diagram
Unit 5 - Summary
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L2: Timekeeping Function
Function = Keep accurate + complete record of valid hours worked for which the co. must remunerate employees.
NB = Clock card
- Numerically accounted for
- Stored at clock machine
- Foreman must sign clock card as proof approval of hours worked.
Clock machine:
- Situated at entrance/exit
- Supervised
- Protected by "turn style" type mechanism.
L5: Substantive testing
Substantive Analytical:
- Obtain understanding of business
- Evaluate effectiveness of internal controls
- Prelim analytics (i.e. CY vs PY)
- Audit deductions GL account
Detail Substantive:
- Validity/Occurrence (i.e. test accuracy of payroll, test GL accounts, check existence of employees etc.)
- Completeness (i.e. Test from source docs to accounting records, perform analytical procedures on wages, investigate unclaimed wages etc.)
L4: Controls
General:
- Segregation of duties
- Stationery control
- Scrutiny of all records
Other controls:
- Validity + Authorisation (Recorded wages are valid)
- Completeness (Transactions are recorded)
- Accuracy (Shown at correct amounts)
Recording (Transactions are correctly recorded)
- Cut off (Recorded in correct reporting period)
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