Write in point form an audit programme to cover salary and wages of a small size firm

To obtain sufficient appropriate audit evidence that: n

Completeness

n Existences

n Accuracy

Of salaries and wages is not significantly misstated

reference

date

n Verify that the payroll is reviewed and

authorised by a senior responsible official before the salaries are paid;

n Confirm that the computation of wages is

n  carried out by an independent person

Confirm that a review of new employees who

have joined the company and leavers is carried out before wages and salaries are paid;

n Confirm that a month-to-month reconciliation

is prepared and changes in wages and salaries

from one month to the next investigated.

Substantive procedures Analytical review

n  Compare the current years wages and salaries to the previous year and obtain explanations for any significant movements noted;

n  For salaries perform a reasonableness test by taking the previous year‘s audited salaries expense. Adjust this for any salary adjustments and for new employees and leavers. Compare the expected salary expense to the actual charge as per the client‘s ledger and obtain explanations for any significant variances;

n  For wages obtain the month on month average number of employees and the average rate of pay per day. Using this data recomputed the expected wages expense and compare this with the actual amount as per client‘s ledger. Obtain explanations for any significant variances.

Tests of details

Obtain a sample of employees and compare the salary as per the payroll to the employment contract;