Question: What substantive tests of details of transactions and balances are
What substantive tests of details of transactions and balances are used to verify the pricing of manufactured inventory items? Which assertion do these procedures mainly address?
Answer to relevant QuestionsDescribe a walk-through of the payroll transaction flow from hiring authorization to payroll cheque disbursement. What document copies would be collected? What are common errors and fraud in the payroll process? Which control characteristics are auditors looking for to prevent or detect these errors and fraud? If the actual sales for the year are substantially lower than the sales forecast at the beginning of the year, what potential valuation problems may arise in the production cycle accounts? In a production situation similar to the Audit 13.1 case, what substantive audit work should be done on a sample of completed production orders (cost reports) recorded as cost of goods sold? Required: Prepare a schedule of the major risks in the payroll process. Identify the control objectives and financial statement assertions related to each. Lay out a three- column schedule asfollows:
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