A.(2)- have a paymaster who has no other payroll responsibility distribute the payroll checks.
B.(3)- Employees might be paid for hours they did not work.
C.(3)- authorization of transactions from the custody of related assets.
TYPE OF TEST
TRANSACTION-RELATED AUDIT OBJECTIVE(S)
1. Substantive test of transactions
To determine if monthly payroll costs have been correctly allocated (accuracy).
2. Test of control
To determine if recorded payroll transactions are for work actually performed by existing employees (occurrence).
3. Substantive test of transactions
To determine if employees are paid for the hours they have worked (accuracy).
4. Substantive test of transactions
To determine if the appropriate person is paid and amount and time are correct (accuracy and timing).
5. Substantive test of transactions
To determine if the correct job is charged for labor and if the amount is recorded correctly for each job (classification and accuracy).
6. Test of control
To determine if all payroll checks are recorded (completeness).
7. Substantive test of transactions
To determine whether terminated employees were subsequently paid for work not performed (occurrence). To determine whether an obligation may exist for unpaid severance pay (completeness).
A.(3)- The perpetual inventory system will not allow an addition of inventory to be posted without entry of a valid receiving report number.
B.(2)- forwarded to the receiving department.
C.(1)- Maintain a perpetual inventory master file of only the more valuable items with frequent periodic verification of the validity of the perpetuals.
A.(1)-Costs have been correctly assigned to finished goods, work-in-process, and cost of goods sold.
B.(2)- Receiving reports
C.(2)- Purchasing agents who arrange for shipment of raw materials from vendors are responsible for verifying actual receipt of the inventory items at the receiving dock.