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Assignment: Although payroll is often seen as a low-risk area, considerable loss can occur in payroll. Knowing how to audit payroll has become increasingly important. Payroll expense can exceed 50% of total expenses in some companies. As such, it is considered a significant transaction. As you determine high-risk areas, you will begin to build your audit program. With regard to the assertions noted below, develop an internal control, test (and the documentation or evidence to support the test), control, and assertion. Additionally, test an internal control for each assertion that relates to payroll. The audit control and test will act as the basis for your audit program.
The assertions include the following:
• Occurrence
• Completeness
• Authorization
• Accuracy
• Cutoff
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