Reference no: EM132790021

Following are some of the audit procedures of payroll transactions (Each procedure is to be done on a sample basis)

a) Reconcile the monthly payroll total for direct manufacturing labour with labour cost distribution.

b) Examine the timecard for the approval of a supervisor.

c) Recompute hours on the timecards and compare the total with the total hours for which each employee has been paid.

d) Compare the employee name, date, cheque number and amounts on canceled cheques with the payroll journal.

e) Trace the hours from the employee timecards to job tickets to make sure the total reconciles, and trace each job ticket to the job-cost record.

f) Account for a sequence of payroll cheques in the payroll account.

g) Select employees from the personnel file who have been terminated and determine whether their termination pay was in accordance with the union contract. As part of this procedure, examine two subsequent periods to determine whether the terminated employee is still being paid.

Required:

Problem i. Identify whether each of the procedures is primarily a test of control or a substantive test.

Problem ii. Explain briefly the objective(s) of each of the audit procedures.