Alyssa Ghose is auditing payroll accruals for a manufacturingcompany. The client has accrued payroll taxes, accrued vacation pay, and accrued bonusesfor salespersons as of the end of the fiscal year. Alyssa performed the following auditprocedures.1. Compared all accrual balances in the current year to the prior year and noted nosignificant fluctuations.2. Traced the subsequent payment of payroll taxes to the cash disbursements journaland the bank statement.3. Reviewed a sample of contracts with salespersons to verify the bonus formula.4. Reviewed cancelled checks for a sample of checks disbursed after year end for unusedvacation pay.a. Are the audit procedures performed by Alyssa sufficient to test accrued payroll tax,vacation pay, and bonuses? If not, what additional procedures should she perform?b. For each additional procedure you recommend in part a., identify the related auditobjective the procedure would satisfy.
Alyssa Ghose is auditing payroll accruals for a manufacturing
company. The client has accrued payroll taxes, accrued vacation pay, and accrued bonuses
for salespersons as of the end of the fiscal year. Alyssa performed the following
procedures
1. Compared all accrual balances in the current year to the prior year and noted no
significant fluctuations.
2. Traced the subsequent payment of payroll taxes to the cash disbursements journal
and the bank statement.
3. Reviewed a sample of contracts with salespersons to verify the bonus formula.
4. Reviewed cancelled checks for a sample of checks disbursed after year end for unused
vacation pay.
a. Are the audit procedures performed by Alyssa sufficient to test accrued payroll tax,
vacation pay, and bonuses? If not, what additional procedures should she perform?
b. For each additional procedure you recommend in part a., identify the related audit
objective the procedure would satisfy.
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