Audit objectives – payroll system

The audit objective is to carry out audit work so as
to gather sufficient appropriate evidence to validate the assertions about the
payroll system.
These can be summarized as:

·        
Payment for wages and salaries relate to work
done for the company being audited (occurrence)
·        
All payment of wages and salaries that should have
been recorded (completeness)
·        
Wages and salaries and any deductions relating to
them have been calculated and recoded at the correct amounts (accuracy)
·        
All  the
relevant payments and liabilities have been recorded in the correct accounts in
the nominal ledger and any other related records e.g. costing
records(classification)
These are businesses where payroll can be a
particularly difficult area such as those involving a lot of casual workers
where sums are paid in cash often with little documentation. Where there is a
risk of fraud it is the practice that auditors have to be very much aware of
this when they are designing their procedure

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