The following are steps in the methodology for designing tests of controls, substantive tests of transactions, and tests of details of balances for the payroll and personnel cycle:
1. Design tests of details of balances for the payroll and personnel cycle.
2. Evaluate risk and materiality for payroll expense and liability accounts.
3. Evaluate whether control risk can be assessed as low for payroll.
4. Design and perform payroll- and personnel-related analytical procedures.
5. Identify controls and deficiencies in internal control for the payroll and personnel cycle.
6. Obtain an understanding of the payroll and personnel cycle internal controls.
7. Evaluate tests of controls and substantive tests of transactions results.
8. Design payroll and personnel cycle tests of controls and substantive tests of trans actions.
9. Assess inherent risk for payroll-related accounts.


Required
a. Identify (1) those steps that are tests of controls or substantive tests of transactions and (2) those that are tests of details of balances.
b. Put steps that are tests of controls and substantive tests of transactions in the order of their performance in most audits.
c. Put the tests of details of balances in their proper order.