McCarthy CPA was engaged to audit the financial statements of
McCarthy, CPA, was engaged to audit the financial statements of Kent Company, a continuing audit client. McCarthy is about to audit Kent’s payroll transactions. Kent uses an in- house payroll department to process payroll data and to prepare and distribute payroll checks.
During the planning process, McCarthy determined that the inherent risk of overstatement of payroll expense is high. In addition, McCarthy obtained an understanding of internal control and set the control risk for payroll-related assertions at the maximum level.

Describe the audit procedures McCarthy should consider performing in the audit of Kent’s payroll transactions to address the risk of overstatement. Do not discuss Kent’s internal control.

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