Liam has the task of designing the audit program for the payroll area. There have been no

Question:

Liam has the task of designing the audit program for the payroll area. There have been no recent changes to the payroll system, or its interface with the general ledger. Among other tests, Liam is considering using the following analytical procedures to gather evidence:

1. Compare payroll tax expenses to the annual payroll times the statutory tax rates.

2. Compare the relationship between direct labour costs and number of employees with prior periods.


Required

(a) Discuss the type of evidence which would be obtained from each of the procedures.

(b) Would your answer be any different if there had been recent changes to the payroll system? Explain.

Fantastic news! We've located the answer you've been seeking!

Step by Step Answer:

Related Book For  answer-question

Auditing A Practical Approach

ISBN: 9780730382645

4th Edition

Authors: Robyn Moroney, Fiona Campbell, Jane Hamilton

Question Posted: