...CASE STUDY: THE TROLLEY DODGERS 1. Identify the key audit objectives for a client’s payroll function. Comment on both objectives related to tests of control and those related to tests of control s and those related to substantive audit procedure. The key audit objectives for client’s payroll function in this Trolley Dodgers Case are: i. Occurrence ii. Completeness iii. Accuracy iv. Posting & Summarization v. Classification vi. Timing i. Key Audit Objective : Occurrence Dodgers must recorded payroll payments for existing employees only and should have separation of duties for each task. Test of Control: Examine internal control to see if the payroll payments are for exiting work and existing employees. The test could be examining all the workers time cards, personnel files and review organization chart. They also can discuss with employees and observe duties being performed. The tests would examine printouts of transactions rejected by the computer as having nonexistent employee numbers. Substantive Test of Transactions: The test to see if the right dollar amount in the payrolls were recorded and paid properly. They also test to review large dollar amount in the journal entries, general ledger and payroll earnings. Examine cancelled checks for proper endorsement could be compare with a personnel record. ii. Key Audit Objective : Completeness Dodgers must record all existent payroll transactions. Test of Control: The test is to see if the existing...
Words: 1039 - Pages: 5
...Assisnment PrintView Page of 12 I C*N,WL awar0: 4 t . 10 points priceof purchased with an invoice taos Company merchandise resalefrom TusconCompany for Taospaidwithin the n160. merchandise costTuscon The had and termsof 2110, $14,322. $21,000 credit period. inventory system. Assume bothbuyer seller a perpetual that and use discount (Omit the "$" sign in your l(a)Prepare entriesthat the buyershouldrecordfor the purchase. response.) General Journal Merchandise inventory payable lAccounts Debit l,:J l Credit | 21,000 *****-**r*i i {"?1,oqa (Omitthe "$" sign in your record the cashpayment. for 1(b)Prepare entries that the buyershould response.) General Journal *- Debit Credit lAccil *;-i"*"t"il I M"'"h;;.ld I Cash *" lLiulil f)?;ooDl420 f ;t58r Debit Credit (Omitthe "$" sign in your response.) Prepare record thesale. for 2(a) entries theseller that should General Journal lAccountsreceivable l:l -ffi r*Tiw6f*TTWI' f 74"'?* ry--**ffi {t6 f soods sotd llvr"r"n"nclr" f*-14)2- (Omitthe "$" sign in your 2(b)Prepare for entries that the sellershould record the cashcollection. response.) General Journal I Cash l S a l e sd i s c o u n t s LJ ***'*"*1*1 t :,1 Debit Credit f-ffiH8r f* 420 r?Criivabil********-**i*1,.] fAccountJ I zUaii Assume that the buyerborrowed enough cashto pay the balance the lastday of the discount on period an annual period. at interest of 11o/o paidit backon the lastdayof...
Words: 2511 - Pages: 11