In the audit of Larnet Manufacturing Pty Ltd, the auditor concluded that internal controls were inadequate because of the lack of segregation of duties. As a result, the decision was made to carry out a surprise payroll audit one month before the client's balance date. Because the auditor had never been involved in a payroll audit, she didn't know how to proceed.

REQUIRED

a. What is the purpose of a surprise payroll audit?

b. What other audit procedures can the auditor perform that may fulfil the same objectives?

c. Discuss the procedures that the auditor should require the client to observe while the surprise payroll audit is taking place.

d. At the completion of the payroll audit, there are often several unclaimed cheques. What procedures should be followed for these?