Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 20, Problem 23DQP
a.
To determine
Identify that the
b.
To determine
Identify the audit objective that would satisfy the additional procedure recommended.
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) The following audit procedures are typical of thosefound in auditing the payroll and personnel cycle:1. Obtain a schedule of all payroll liabilities and trace to the general ledger.2. Scan journals for all periods for unusual transactions to determine whether they arerecorded correctly.3. Select a sample of 40 entries in the payroll journal and trace each to an approvedtime card.4. Discuss with management any payroll liabilities recorded in the prior year that arenot provided for in the current period.5. Examine evidence that payroll hours and wage rates are verified by an independentperson.6. Select a sample of 20 cancelled payroll checks and account for the numerical sequence.7. Review board of director meeting minutes to verify the salary for the chief executiveofficer.8. Compute payroll tax expense as a percentage of total wages, salaries, and commissions.9. Select a sample of 20 payroll payments and trace to payroll journal entries for name,date, and amounts.10. Examine owner…
Alyssa Ghose is auditing payroll accruals for a manufacturingcompany. The client has accrued payroll taxes, accrued vacation pay, and accrued bonusesfor salespersons as of the end of the fiscal year. Alyssa performed the following auditprocedures.1. Compared all accrual balances in the current year to the prior year and noted nosignificant fluctuations.2. Traced the subsequent payment of payroll taxes to the cash disbursements journaland the bank statement.3. Reviewed a sample of contracts with salespersons to verify the bonus formula.4. Reviewed cancelled checks for a sample of checks disbursed after year end for unusedvacation pay.a. Are the audit procedures performed by Alyssa sufficient to test accrued payroll tax,vacation pay, and bonuses? If not, what additional procedures should she perform?b. For each additional procedure you recommend in part a., identify the related auditobjective the procedure would satisfy.
Assume that you have audited accounts receivable as of 12/31/2020 and are confident that the ending balance should be $7,188,000. Further, you know that the audited balance as of 12/31/2019 was $8,462,000. You also verified cash deposits from customers through a review of the bank account. Based on that review you believe that cash receipts from customers ranges from an amount of $40,000,000 to $41,000,000.
Which amount below would represent an overstatement of revenue for the year ending 12/31/2020, based on the facts above?
1. $38,500,000
2. $41,000,000
3. $39,762,000
4. $39,100,000
Chapter 20 Solutions
Auditing And Assurance Services
Ch. 20 - Prob. 1RQCh. 20 - Prob. 2RQCh. 20 - Distinguish among a payroll master file, a W-2...Ch. 20 - Prob. 4RQCh. 20 - Prob. 5RQCh. 20 - Prob. 6RQCh. 20 - Prob. 7RQCh. 20 - Prob. 8RQCh. 20 - Prob. 9RQCh. 20 - Prob. 10RQ
Ch. 20 - Prob. 11RQCh. 20 - Prob. 12RQCh. 20 - Prob. 13RQCh. 20 - Prob. 14RQCh. 20 - Prob. 15RQCh. 20 - Prob. 16.1MCQCh. 20 - Prob. 16.2MCQCh. 20 - Prob. 16.3MCQCh. 20 - Prob. 17.1MCQCh. 20 - Prob. 17.2MCQCh. 20 - Prob. 17.3MCQCh. 20 - Prob. 18.1MCQCh. 20 - Prob. 18.2MCQCh. 20 - Prob. 18.3MCQCh. 20 - Prob. 19DQPCh. 20 - Prob. 20DQPCh. 20 - Prob. 21DQPCh. 20 - Prob. 22DQPCh. 20 - Prob. 23DQPCh. 20 - Prob. 24DQPCh. 20 - Prob. 25DQPCh. 20 - Prob. 26DQPCh. 20 - Prob. 27DQPCh. 20 - Prob. 28C
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