f8独立课程part e审计程序逻辑总结

LogicofThereareLogicofTherearetwotypesofauditTestsofTheseareprocedurestotesttheeffectivenessoftheentity’sinternalcontrolspreventingordetectingmaterial SubstantiveTheseareprocedurestodetectmaterialmisstatements.TherearetwoTestsofdetail(forexamplevouchingamountsbacktoinvoices,physicalinspectionofassets)SevenproceduresforAnalyticalproceduresandconfirmationarepurelysubstantiveSevenproceduresforAnalyticalproceduresandconfirmationarepurelysubstantiveEnquiry,inspection,observationandrecalculationcanallbeusedaseitheratestofcontrolorasasubstantiveprocedure.Analyticalproceduresconsistofevaluationsoffinancialinformationthroughanalysisofplausiblerelationshipsamongbothfinancialandnon-financialdata.Analyticalproceduresalsoencompasssuchinvestigationasisnecessaryofidentifiedfluctuationsorrelationshipsthatareinconsistentwithotherrelevantinformationorthatdifferfromexpectedvaluesbyasignificantamount.Reperformanceinvolvestheauditor’sindependentexecutionofproceduresorcontrolsthatwereoriginallyperformedaspartoftheentity’sinternalcontrol.Recalculationconsistsofcheckingthemathematicalaccuracyofdocumentsorrecords.RecalculationmaybeperformedmanuallyorInspectioninvolvesexaminingrecordsordocuments,whetherinternalorexternal,inpaperform,electronicform,orothermedia,oraphysicalexaminationofanasset.Observationconsistsoflookingataprocessorprocedurebeingperformedbyothers.Inquiryconsistsofseekinginformationfromknowledgeablepersons,bothfinancialandnon-financial,withintheentityoroutsidetheAnexternalconfirmationrepresentsauditevidenceobtainedbytheauditorasadirectwrittenresponsetotheauditorfromathirdparty,inpaperform,electronicformorbyothermedium.AnalyticalproceduresasasubstantiveAnalyticalproceduresasasubstantiveTherearethreemaintypesofanalyticalprocedureswhichanauditorcan•Varianceanalysis-thereviewofcurrentyearfinancialinformationincomparisontothepriorperiodorbudgetedinformation.Ratioanalysis–thecalculationofratiosandanalysisandinvestigationofsignificantdifferences.Proofintotal–theuseofinterrelationshipsbetweendata(financialandnon-financial)toestimateanexpectedvalueinthefinancialagainwiththeinvestigationofsignificant••ProofinAccuracyofloaninterestTheexpectedinterestchargeis:averageloanbalance*averageinterestThisexpectedinterestchargeiscomparedtotheactualexpenserecognisedinthefinancialstatementsandexplanationssoughtforanysignificantdifferences.AccuracyofwagesexpectedamountcouldbecalculatedSubstantiveprocedurestoconfirmreceivablesbalance DescribeSubstantiveprocedurestoconfirmreceivablesbalance DescribesubstantiveprocedurestheauditorshouldperformtoTinkerbell’syear-endreceivablesbalance.(8Calculateaveragereceivabledaysandcomparethistoprioryear,investigatesignificantPerformapositivetradereceivablescircularizationofarepresentativesampleTinkerbell’syear-endbalances,foranynon-replies,withTinkerbell’spermission,sendareminderlettertofollowup.Selectasampleofyear-endreceivablebalancesandagreebacktovaliddocumentationofGDNandsalesordertoensureSelectasampleofgoodsdispatchednotes(GDN)beforeandjustaftertheyearendandfollowthroughtothesalesinvoicetoensuretheyarerecordedinthecorrectaccountingperiod.Reviewtheafterdatecashreceiptsandfollowthroughtopre-year-endInspecttheagedreceivablesreporttoidentifyanyslowmovingbalances,thesewiththecreditcontrolmanagertoassesswhetheranallowanceorwritedownisForanyslowmoving/agedbalancesreviewcustomercorrespondencetowhetherthereareanyinvoicesinReviewboardminutesofTinkerbelltoassesswhetherthereareanymaterialReviewasampleofpostyear-endcreditnotestoidentifyanythatrelatepre-year-endtransactionstoverifythattheyhavenotbeenincludedin•Obtainalistingof•Obtainalistingoftradepayablesfromthepurchaseledgerandagreethetotalthegeneralledgerandthefinancial•Reviewthelistoftradepayablesagainstprioryearstoidentifyany•Selectasampleofyear-endreceivablebalancesandagreebacktosupportingdocumentationofGDNandsalesordertoensure•EnsurepayablesincludedinfinancialstatementsascurrentTradepayablesand2010/12Tradepayablesand2010/12(c)Describesubstantiveprocedurestheauditorshouldperformontheyear-endtradepayablesofGreystoneCo.(5CalculatethetradepayabledaysforRoseLeisureClubsCo(Rose)andcomparetoprioryears,investigateanysignificantdifference,inparticularanydecreasefor•Obtainsupplierstatementsandreconcilethesetothepurchaseledgerbalances,andinvestigateanyreconcilingitems.Selectasampleofpayablebalancesandperformatradepayables’circularization,followupanynon-repliesandanyreconcilingitemsbetweenthebalanceconfirmedandthetradepayables’balance.Selectasampleofgoodsreceivednotesbeforetheyearendandaftertheyearendandfollowthroughtoinclusioninthecorrectperiod’spayablesbalance,toensurecorrectcut-off.Reviewafterdatepayments,iftheyrelatetothecurrentyearthenfollowthroughtothepurchaseledgeroraccruallistingtoensurecompleteness.Enquireofmanagementtheirprocessforidentifyinggoodsreceivedbutnotinvoicedorloggedinthepurchaseledgerandensurethatitisreasonableensurecompletenessof•••••Comparetheoveralllevel•Comparetheoveralllevelofrevenueagainstprioryearsandbudgetinvestigateanysignificant•Obtainascheduleofsalesfortheyearbrokendownintothetwocategoriesofhotelandtradecustomersandcomparethistotheprioryearbreakdownandforanyunusualmovementsdiscusswith•CalculatethegrossprofitmarginforHummingbirdandcomparethistotheyearandinvestigateanysignificant•Selectasampleoftradecustomerordersplacedonlineandagreethesetodispatchnotesandsalesinvoicesthroughtoinclusioninthesalesledgertoensurecompletenessofrevenue.•Selectasampleofsalesinvoicesforhotelcustomersandagreethesalesbacktothecontractedratestoensuretheaccuracyof•Selectasampleofdispatchnotesbothpreandpostyearend;followthesethroughtosalesinvoicesinthecorrectaccountingperiodtoensurethatcut-offhasbeencorrectly•Selectasampleofcreditnotesraised,tracethroughtotheoriginalinvoiceensureinvoicecorrectlyremovedfromInventoryCountDec2012(a)FortheinventorycountarrangementsofLilyWindowGlassIdentifyandexplainSIXdeficiencies;ProvidearecommendationtoaddresseachThetotalmarkswillbesplitequallybetweeneachpart(12LilyWindowGlassCo(Lily)isaglassmanufacturer,whichoperatesfromalargeproductionfacility,whereitundertakescontinuousproduction24hoursaday,sevendaysaweek.Alsoonthissitearetwowarehouses,wherethecompany’srawmaterialsandfinishedgoodsarestored.Lily’syearendInventoryCountDec2012(a)FortheinventorycountarrangementsofLilyWindowGlassIdentifyandexplainSIXdeficiencies;ProvidearecommendationtoaddresseachThetotalmarkswillbesplitequallybetweeneachpart(12LilyWindowGlassCo(Lily)isaglassmanufacturer,whichoperatesfromalargeproductionfacility,whereitundertakescontinuousproduction24hoursaday,sevendaysaweek.Alsoonthissitearetwowarehouses,wherethecompany’srawmaterialsandfinishedgoodsarestored.Lily’syearendis31Lilyisfinalisingthearrangementsfortheyear-endinventorycount,whichistobeundertakenon31December2012.Thefinishedwindowsarestoredwithin20aislesofthefirstwarehouse.Thesecondwarehouseisforlargepilesofrawmaterials,suchassand,usedinthemanufactureofglass.ThefollowingarrangementshavebeenmadefortheinventoryThewarehousemanagerwillsupervisethecountasheismostfamiliarwiththeinventory.Therewillbetenteamsofcountersandeachteamwillcontaintwomembersofstaff,onefromthefinanceandonefromthemanufacturingdepartment.Noneofthewarehousestaff,otherthanthemanager,willbeinvolvedintheEachteamwillcountanaisleoffinishedgoodsbycountingupandthendowneachaisle.Asthisprocessissystematic,itisnotfeltthattheteamwillneedtoflagareasoncecounted.Oncetheteamhasfinishedcountinganaisle,theywillhandintheirsheetsandbegivenasetforanotheraisleofthewarehouse.Inadditiontotheabove,toassistwiththeinventorycounting,therewillbetwoteamsofcountersfromtheThecountsheetsaresequentiallynumbered,andtheproductcodesanddescriptionsareprintedonthembutnoquantities.Ifthecountersidentifyanyinventorywhichisnotontheirsheets,thentheyaretoentertheitemonaseparatesheet,whichisnotnumbered.Onceallcountingiscomplete,thesequenceofthesheetsischeckedandanyadditionalsheetsarealsohandedinatthisstage.AllsheetsarecompletedinAnydamagedgoodsidentifiedbythecounterswillbetooheavytomovetoacentrallocation,hencetheyaretobeleftwheretheyarebutthecounteristomakeanotetheinventorysheetsdetailingthelevelofAsLilyundertakescontinuousproduction,therewillcontinuetobemovementsrawmaterialsandfinishedgoodsinandoutofthewarehouseduringthecount.Thesewillbekepttoaminimumwherepossible.Thelevelofwork-in-progressinthemanufacturingplantistobeassessedbythewarehousemanager.Itislikelythatthiswillbeanimmaterialbalance.Inaddition,therawmaterialsquantitiesaretobeapproximatedbymeasuringtheheightandwidthoftherawmaterialpiles.Inthepastthistaskhasbeenundertakenbyaspecialist;however,thewarehousemanagerfeelsconfidentthathecanperformthisBackground-Thewarehousemanagerisplanningtosupervisetheinventorycount.Whilstheisfamiliarwiththeinventory,hehasoverallresponsibilityforThelevelofwork-in-progressinthemanufacturingplantistobeassessedbythewarehousemanager.Itislikelythatthiswillbeanimmaterialbalance.Inaddition,therawmaterialsquantitiesaretobeapproximatedbymeasuringtheheightandwidthoftherawmaterialpiles.Inthepastthistaskhasbeenundertakenbyaspecialist;however,thewarehousemanagerfeelsconfidentthathecanperformthisBackground-Thewarehousemanagerisplanningtosupervisetheinventorycount.Whilstheisfamiliarwiththeinventory,hehasoverallresponsibilityfortheinventoryandsoisnotindependent.HemaywanttohideinefficienciesandanyissuesthatarisesothathisdepartmentisnotAnalternativesupervisorwhoisnotnormallyinvolvedwiththeinventory,suchasaninternalauditmanager,shouldsupervisetheinventorycount.Therearetenteamsofcounters,eachteamhavingtwomembersofstaff.However,thereisnocleardivisionofresponsibilitieswithintheteam.Therefore,bothmembersofstaffcouldcounttogetherratherthancheckingeachother’scount;anderrorsintheircountmaynotbeEachteamshouldbeinformedthatbothmembersarerequiredtocounttheirassignedinventoryseparately.Therefore,onecountsandthesecondmemberchecksthattheinventoryhasbeencountedTheinternalauditteamsareundertakinginventorycountsratherthanreviewingthecontrolsandperformingsampletestcounts.TheirroleshouldbefocusedonconfirmingtheaccuracyoftheinventorycountingTheinternalauditcountersshouldsamplecheckthecountingundertakenbythetenteamstoprovideanextracontroloverthecompletenessandaccuracyofthecount.Onceareasarecounted,theteamsOnceareasarecounted,theteamsarenotflaggingtheaislesascompleted.Thereforethereistheriskthatsomeareasofthewarehousecouldbedoublecountedormissedout.Allareasshouldbeflaggedascompleted,oncetheinventoryhasbeencounted.Inaddition,internalauditorthecountsupervisorshouldcheckattheendofthecountthatall20areashavebeenflaggedascompleted.Inventorynotlistedonthesheetsistobeenteredontoseparatesheets,whicharenotsequentiallynumbered.Thereforethesupervisorwillbeunabletoensurethecompletenessofallinventorysheets.Eachteamshouldbegivenablanksheetforenteringanyinventorycountwhichisnotontheirsheets.Thisblanksheetshouldbesequentiallynumbered,anyunusedsheetsshouldbereturnedattheendofthecount,andthesupervisorshouldcheckthesequenceofallsheetsattheendoftheThesheetsarecompletedininkandthereisnoindicationthattheyaresignedbythecountingteam.Thereforeifanyissuesarisewiththecountinginanaisle,itwillbedifficulttofollowupastheidentityofthecountingteamwillnotbeknown.Allinventorysheetsshouldbesignedbytherelevantteamuponcompletionofanaisle.Whenthesheetsarereturned,thesupervisorshouldcheckthattheyhavebeensigned.Damagedgoodsarenotbeingstoredinacentralarea,andinsteadthecounterisjustnotingontheinventorysheetsthelevelofdamage.However,itwillbedifficultforthefinanceteamtodecideonanappropriatelevelofwritedowniftheyarenotabletoseethedamagedgoods.Inaddition,ifthesegoodsareleftintheaisles,theycouldbeinadvertentlysoldtocustomersormovedtoanotherDamagedgoodsshouldbeclearlyflaggedbythecountingteamsandattheendofthecountappropriatemachineryshouldbeusedtomovealldamagedwindowstoacentrallocation.Thiswillavoidtheriskofsellingthesegoods.AseniormemberofthefinanceteamshouldtheninspectthesegoodstoassessthelevelofanywritedownorLilyWindowGlassCo(Lily)undertakescontinuousproductionandsotherewillbemovementsofgoodsduringthecount.Inventoryrecordscouldbeunder/overstatedifgoodsaremissedordoublecountedduetomovementsinthewarehouse.Itisnotpracticaltostopallinventorymovementsastheproductionneedstocontinue.However,anyrawmaterialsrequiredfor31Decembershouldbeestimatedandputtooneside.Thesewillnotbeincludedasrawmaterialsandinsteadwillbework-in-progress.Thegoodswhicharemanufacturedon31Decembershouldbestoredtooneside,andattheendofthecountshouldbecountedonceThegoodswhicharemanufacturedon31Decembershouldbestoredtooneside,andattheendofthecountshouldbecountedonceandincludedwithinfinishedAnygoodsreceivedfromsuppliersshouldbestoredinonelocationandcountedonceattheendandincludedaspartofrawmaterials.Goodstobedespatchedtocustomersshouldbekepttoaminimumforthedayofthecount.Thewarehousemanageristoassessthelevelofwork-in-progressandrawmaterials.Inthepast,aspecialisthasundertakenthisrole.Itisunlikelythatthewarehousemanagerhastheexperiencetoassessthelevelofwork-in-progressasthisissomethingthatthefactorymanagerwouldbemorefamiliarwith.Aspecialistshouldbeutilizedtoassessbothwork-in-progressandthequantitiesofrawmaterials.Practice3InventoryDec2007OnPractice3InventoryDec2007Onthedayoftheinventorycount,youattendeddepotnineatDinZee.YouthefollowingPrenumberedcountsheetswerebeingissuedtoclient’sstaffcarryingoutthecount.Thecountsheetsshowedtheinventoryledgerbalancesforcheckingagainstphysicalinventory.Allcountstaffweredrawnfromtheinventorywarehouseandwerecountinginteamsoftwo.Threecountingteamswereallocatedtoeachareaofthestorestocount,althoughtheteamswereallowedtodecidewhichpairofstaffcountedwhichinventorywithineacharea.StaffwerewarnedthattheyhadtorememberwhichinventoryhadbeencountedInformationwasrecordedonthecountsheetsinpencilsoamendmentscouldbemadeeasilyasrequired.Anyinventorynotlocatedonthepre-numberedinventorysheetswasrecordedonseparateinventorysheets–whichwerenumberedbystaffastheywereused.Attheendofthecount,allcountsheetswerecollectedandthesequenceofthesheetschecked;thesheetswerenotListtheweaknessesinthecontrolsystemforcountinginventoryatdepotnine.(3marks)Foreachweakness,explainwhyitisaweaknessandstatehowweaknesscanbeovercome.(9InventoryCountAuditInventorycount–ⅠInventoryCountAuditInventorycount–Ⅰ•ReviewworkingpapersforpreviousyeartoidentifyrisksandfamiliarizeyourselfwiththeinventoriesDeterminearrangementswithmanagementinInventoriesheldby/forthirdparties–whatarrangementshavebeenmade?Reviewclient’sinventorycountinstructionsConsidertheneedforan••••ⅡDetermineprocedurestocoverarepresentativeselectionofInventorycount–Before ListFOURauditproceduresthatanauditorwillnormallyperformpriorattendingtheclient’spremisesonthedayoftheinventorycount.(2•••••••ReviewprioryearworkingContactclienttoobtainstocktakinginstructionsBookauditstafftoattendtheinventorycountsObtaincopyofinventorycountinstructionsfromclientAscertainwhetheranyinventoryisheldbythirdpartiesObtainlastyear’sinventorycountmemoPrepareauditprogrammefortheInventorycount–Dec2012 DescribetheprocedurestobeundertakenbytheauditorDURINGtheinventorycountofLilyWindowGlassCoinordertogainsufficientappropriateauditevidence.(6•ObservethecountingteamsofLilytoconfirmwhethertheinventoryinstructionsarebeingfollowed•Selectasampleandperformtestcountsfrominventorysheetstoaisleandfromwarehouseaisletoinventory•Confirmtheproceduresforidentifyingandsegregatingdamagedgoodsoperating•Obtainaphotocopyofthe•Obtainaphotocopyofthecompletedsequentiallynumberedsheetsforfollowuptestingonthefinal•Identifyandmakeanoteofthelastgoodsreceivednotes(GRNs)anddispatchednotes(GDNs)for31Decemberinordertoperformcut-off•Identifyandrecordanyinventoryheldforthirdparties(ifany)andthatitisexcludedfromtheInventorycount–•••••TraceowntestcountitemsthroughtofinalinventorysummaryInspectrepliesfromthirdpartiesInformmanagementofanyproblemsFollowupcut-offdetailsEnsurenecessaryadjustmentstobookinventorieshavebeenmaderecordsareInventoryInventory–PerformareviewoftheaverageinventorydaysforthecurrentyearandcomparetopriorInventoryInventory–Performareviewoftheaverageinventorydaysforthecurrentyearandcomparetoprioryearinventorydays.DiscussanysignificantvariationswithComparethegrossmarginforcurrentyearwithprioryear.Fluctuationsingrossmargincouldbeduetoinventoryvaluationissues.Discusssignificantvariationsinthemarginwithmanagement.Selectarepresentativesampleofgoodsininventoryattheyearend,agreethecostpertherecordstoarecentpurchaseinvoiceandensurethatthecostiscorrectlystated.ForasampleofmanufactureditemsobtaincostsheetsandrawmaterialcoststorecentpurchaselabourcoststotimesheetsorwageoverheadsallocatedareofaproductionSelectasampleofinventoryfromtheinventorysheetandperformphysicalcount.Confirmthatitemsinspected:QuantitiesareAreingoodEForinventoryheldbythirdpartiessendconfirmationtoverifytheinventorybalanceattheyearendEForthesampleofinventoryphysicallycounttracethemtoinventoryCReviewagedinventoryReviewagedinventoryreportsandidentifyanyslowmovinggoods,discusswithmanagementwhytheseitemshavenotbeenwrittendown.Followupanydamaged/obsoleteitemsnotedbytheauditorattheinventorycountsattended,toensurethattheinventoryrecordshavebeenupdatedcorrectly.SelectasampleofyearendgoodsandreviewpostyearendsalesinvoicestoascertainifNRVisabovecostorifanadjustmentisrequired.WagecycleWagesystem-Control•••••••EmployeesareonlypaidforworkthattheyhavedoneGrosspayhasbeencalculatedcorrectlyOvertimehasbeenauthorisedWagecycleWagesystem-Control•••••••EmployeesareonlypaidforworkthattheyhavedoneGrosspayhasbeencalculatedcorrectlyOvertimehasbeenauthorisedproperlyNetpayhasbeencalculatedcorrectlyGrossandnetpayhavebeenrecordedaccuratelyinthegeneralledgerOnlygenuineemployeesarepaidCorrectamountsarepaidtotaxationDec2011IntroductionandclientYouaretheauditseniorofBlair&CoandyourteamhasjustcompletedtheinterimauditofChuckIndustriesCo,whoseyearendis31January2012.Youareintheprocessofreviewingthesystemstestingcompletedonthepayrollcycle,aswellaspreparingtheauditprogrammesforthefinalChuckIndustriesComanufactureslightsandthemanufacturingprocessispredominantlyautomated;howeverthereisaworkforceof85employees,whomonitorthemachines,aswellasapproximately50employeeswhoworkinsalesandadministration.Thecompanymanufactures24hoursadaysevendaysaBelowisadescriptionofthepayrollsystemalongwithdeficienciesidentifiedbyauditThecompanyoperatesthreeshiftseverydaywithemployeesworkingeighthourseach.Theyarerequiredtoclockinandoutusinganemployeeswipecard,whichidentifiestheemployeenumberandlinksintothehoursworkedreportproducedbythecomputerizedpayrollsystem.Employeesarepaidonanhourlybasisforeachhourworked.Thereisnomonitoring/supervisionoftheclockingin/outprocessandanemployeewaswitnessedclockinginseveralemployeesusingtheiremployeeswipeThepayrolldepartmentcalculatesonaweeklybasisthecashwagestobepaidtotheworkforce,basedonthehoursworkedreportmultipliedbythehourlywagerate,withappropriatetaxdeductions.Thesecalculationsarenotcheckedbyanyoneastheyaregeneratedbythepayrollsystem.DuringtheyearthehourlywagewasincreasedbytheHumanResources(HR)departmentandthiswasnotifiedtothepayrolldepartmentEachFriday,thepayrolldepartmentpreparesthepaypacketsandphysicallyhandstheseouttotheworkforce,whooperatethemorningandlateafternoonshifts,uponproductionofidentification.However,forthenightshiftworkers,thepaypacketsaregiventothefactorysupervisortodistribute.IfanynightshiftemployeesareabsentonpaydaythenthefactorysupervisorkeepsthesewagesandreturnsthemtothepayrolldepartmentonSalesandadministrationThesalesandadministrationstaffarepaidmonthlybybanktransfer.EmployeenumbersdofluctuateandduringJulytwoadministrationstaffjoined;EachFriday,thepayrolldepartmentpreparesthepaypacketsandphysicallyhandstheseouttotheworkforce,whooperatethemorningandlateafternoonshifts,uponproductionofidentification.However,forthenightshiftworkers,thepaypacketsaregiventothefactorysupervisortodistribute.IfanynightshiftemployeesareabsentonpaydaythenthefactorysupervisorkeepsthesewagesandreturnsthemtothepayrolldepartmentonSalesandadministrationThesalesandadministrationstaffarepaidmonthlybybanktransfer.EmployeenumbersdofluctuateandduringJulytwoadministrationstaffjoined;however,duetostaffholidaysintheHRdepartment,theydelayedinformingthepayrolldepartment,resultinginincorrectsalariesbeingpaid ForthedeficienciesalreadyidentifiedinthepayrollsystemofChuckIndustriesexplainthepossibleimplicationsofthese;suggestarecommendationtoaddresseach(12 DescribesubstantiveproceduresyoushouldnowperformtoconfirmtheaccuracyandcompletenessofChuckIndustries’payrollcharge.(6Wagesystem-ClockinginWagesystem-Wagesystem-ClockinginWagesystem-WagesBackground-Thewagescalculationsaregeneratedbythepayrollsystemandtherearenochecksperformed.Therefore,ifsystemerrorsoccurduringthepayrollprocessingthenthiswouldnotbeidentified.Thiscouldresultinwagesbeingoverorundercalculated,leadingtoanadditionalpayrollcostorlossofemployeegoodwill.Aseniormemberofthepayrollteamshouldrecalculatethegrosstonetpayworkingsforasampleofemployeesandcomparetheirresultstotheoutputfromthepayrollsystem.ThesecalculationsshouldbesignedasapprovedbeforewagespaymentsareBackground-Asthereisnosupervisionoftheclockinginprocessthen,aswitnessed,employeescanclockinmultipleemployeessimplybyusingtheiremployeeswipecards. ThiswillresultinasubstantiallyincreasedpayrollcostforChuckTheclockinginandoutproceduresshouldbesupervisedbyaresponsibleofficialtopreventoneindividualclockinginmultipleemployees.Inaddition,thiscouldcreateaweakercontrolenvironmentwherebyemployeesconsideritacceptablenottofollowControls.EmployeesshouldberemindedabouttheimportanceoffollowingChuckIndustries’policiesandprocedures,especiallyinrelationtotheclockingin/outprocess.Withoutsupervision/monitoringoftheclockinginoroutprocess,employeescouldtrytoboosttheirhoursworkedbyclockingoutseveralhoursaftertheirshifthasfinished,thiswillleadtoinvalidandunauthorisedovertimepayments.Overtimehoursshouldbereviewedbytheproductionsupervisorpriortopayment,toensurethatonlypreviouslyauthorisedovertimeispaidWagesystem-HourlywageWageWagesystem-HourlywageWagesystem-WageBackground-Thefactorysupervisorshouldnotbegiventhepaypacketsofthenightshiftstaffasthisisasignificantamountofcash,beingapproximatelyone-thirdoftheworkforce.Thiscashwillnotbeinasecurelocationandsoisopentotheriskoftheft.ConsiderationshouldbegiventooperatingashiftsystemforthepayrolldepartmentonFridays.Thiswillensurethattherearesufficientpayrollemployeestoperformthewagespayouttothenightshiftemployees.ThereforethesamecontrolsappliedtothemorningandlateafternoonshiftscanbeputinplaceforthenightBackground-ThehourlywagehasbeenincreasedbytheHumanResources(HR)departmentandnotifiedtothepayrolldepartmentverbally.Aspayrollcanbeasignificantexpenseforabusiness,anydecisiontoincreasethisshouldbemadebytheboardasawholeandnotjustbyHR.Thepayrolldepartmentshouldnotacceptverbalnotificationsofpayincreasesasitcouldbeanunauthorizedincrease,oraneffortbyanemployeeinHRtoincreasethepayofcertainmembersofstaff,suchastheirfriends.AllincreasesofpayshouldbeproposedbytheHRdepartmentandthenformallyagreedbytheboardofDirectors.WrittennotificationoftheincreaseshouldbesenttopayrollandHRandonlythenshouldthepayrisebeincorporatedintothepayrollpackageWagesystem-Wagesystem-Background- Notificationofjoinersandleaversshouldbemadeonatimelybasistothepayrolldepartment,evenifsomestaffareonholiday.OtherwiseChuckIndustriescouldcontinuemakingpaymentstoemployeeswhohaveleft,orpaynewemployeeslate,resultinginalossofemployeegoodwill.Duringperiodsofillnessorholidays,keyrolesoftheaffectedemployeesshouldbereallocatedtoothermembersoftheteamtoensurethatcontrolsaremaintained.Formsfornewjoinersshouldbecompletedwhentheyareappointedwithappropriatestartdatesfilledin,theseshouldthenbedistributedtoallrelevantdepartments.Thisshouldreducetheriskofnewjoinersbeingmissedoutbythepayrolldepartment.Wagesystem-substantiveDecWagesystem-substantiveDec2011 DescribesubstantiveproceduresyoushouldnowperformtoconfirmtheaccuracyandcompletenessofChuckIndustries’payrollcharge.(6AgreethetotalwagesandsalariesexpenseperthepayrollsystemtothetrialinvestigateanyComparethetotalpayrollexpensetotheprioryearandinvestigateanyReviewmonthlypayrollcharges,comparethistotheprioryearandbudgetsdiscusswithmanagementanysignificantPerformaproofintotaloftotalwagesandsalaries,incorporatingjoinersandandthepayincrease.Comparethistotheactualwagesandsalariesinthefinancialstatementsandinvestigateanysignificantdifferences.AgreetheindividualwagesandsalariesperthepayrolltothepersonnelrecordsrecordsofhoursworkedperclockinginCastasampleofpayrollrecordstoconfirmcompletenessandaccuracyoftheSelectasampleofjoinersandleavers,agreetheirstart/leavingdatetosupportingdocumentation,recalculatethattheirfirst/lastpaypacketwasaccuratelycalculatedandForsalaries,agreethetotalnetpayperthepayrollrecordstothebanktransferofpaymentsandtotheForwages,agreethetotalcashwithdrawnforwagepaymentsequatestotheweeklywagespaidplusanysurpluscashsubsequentlybankedtoconfirmcompletenessRecalculatestatutorydeductionstoconfirmwhethercorrectdeduc