Risk 6 Salaries expense has decreased over the prior year As it was noted that

Risk 6 salaries expense has decreased over the prior

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occurred and the related commission has been recorded.Risk 6: Salaries expense has decreased over the prior year. As it was noted that there was no change in the total number of employees or type of employees, salary expense would be expected to remain relatively constant. This increases the risk that salary expense is understated.Account and assertion:Payroll expense — completenessProcedure:• Select a sample of employees from the payroll ledger and agree them back to both the timesheets and the employee the payroll amounts are recorded at the correct amount.Risk 7:The payroll cut-off date was Deber 31, but the employees were not paid until January 5in the next could be cut-off errors, as the employees were paid after year end for work performed before year end.Account and assertion: Payroll expense — completeness and cut-offProcedure:• Review the GL account at year end to ensure the year-end December 31 payroll has been recorded in the correct period.Risk 8: As a result of high turnover in the accounting department, some controls related to authorization and approval of expenses have not been strictly adhered to. There is a risk that the expenses have not been appropriately coded and expenses have been recorded in the wrong accounts.Account and assertion: Expense — classification
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  • Spring '10
  • Michaelson

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