ACCA F8 考試：THE AUDIT OF WAGES (Part 4)

FINAL AUDIT

Tests to ensure the accuracy and completeness of balances in respect of wage costs and payroll deductions (Control objectives 5, 6 and 7) are normally substantive in nature and conducted as part the final audit.

A substantive audit programme should include:

• Agree total wages and deductions per selected payrolls to the amounts recorded in the individual general (nominal) ledger accounts

• Perform analytical procedures such as proof in total by using number of employees and average wage. Investigate any significant fluctuations.

• Carry out month-by-month comparisons of total wages with prior year/budgets and investigate differences.

• Agree sundry payables for tax outstanding at the year end to the payroll records and check subsequent payment to cash book.

Computer assisted audit techniques

Use the computer as an audit tool and the most common examples are test data and audit software. These could be employed during the interim and final audit of wages.

Test data consists of data submitted by the auditor to test the operation of application controls such as data-validation (edit) checks. Test data should be input using valid and invalid transactions to check the operation of these controls. Examples include:

• Input employee numbers that do not exist or are in an incorrect format – to ensure these items are rejected and included on an error report.

• Input a gross weekly pay exceeding $2,000 – to ensure these employees are included on an exception report.

• Input overtime hours exceeding 30 hours per week – to ensure these employees are also included on an exception report.

Audit software is normally used by the auditor for substantive testing and can interrogate a client’s computer files, re-perform calculations or extract items for further investigation. Examples include:

• Re-perform calculations of gross wage, deductions and casts on selected payrolls.

• Compare the payroll file at the beginning and end of the period to identify starters and leavers, which could then be checked to appropriate documentation.

• Comparing employee records on payroll file and HR files

SUMMARY

Knowledge of the stages in a typical wages system and the link between control objectives, controls and audit tests should help students distinguish between these terms. It is also important that, for a given wages system, candidates can identify significant deficiencies in internal control, explain the implications of the deficiencies and recommend appropriate controls.

Written by a member of the Paper FAU examining team

Last updated: 20 Apr 2015