The following are steps in the methodology for designing tests of controls, substantive tests of transactions, and tests of details of balances for the payroll and personnel cycle:
1. Design tests of details of balances for the payroll and personnel cycle.
2. Evaluate whether control risk can be assessed as low for payroll.
3. Design and perform payroll- and personnel-related substantive analytical procedures.
4. Identify controls and deficiencies in internal control for the payroll and personnel cycle.
5. Evaluate tests of controls and substantive tests of transactions results.
Required
Required
In-class
Discussion
Required
696Part 4 / APPLICATION OF THE AUDIT PROCESS TO OTHER CYCLES
6. Design payroll and personnel cycle tests of controls and substantive tests of
transactions.
7. Assess inherent risk for payroll-related accounts.
8. Evaluate risk and materiality for payroll expense and liability accounts.
9. Obtain an understanding of the payroll and personnel cycle internal controls.
a. Identify (1) those steps that are tests of controls or substantive tests of transactions
and (2) those that are tests of details of balances.
b. Put steps that are tests of controls and substantive tests of transactions in the order of their performance in most audits.
c. Put the tests of details of balances in their proper order.
