Question: Anna Mourani has the task of designing the audit program for the payroll area. There have been no recent changes to the payroll system, or

Anna Mourani 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, Anna is considering using the following analytical procedures to gather evidence:

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

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

Required

Discuss the type of evidence that would be obtained from each of the procedures.

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