As Part of Your Audit of the Payroll for Jones

question 14

Essay

As part of your audit of the payroll for Jones Chu Company Limited (JCC),you used generalized audit software.You had available to you the payroll transactions for the month of September and the employee master file as of September 30.You conducted the following tests,with results noted:
1.Ran a duplicates test on employee number in the transaction file.You found that one employee,employee #320,had been paid twice,using cheque numbers 12376 and 12377.
2.Checked the calculation of "pay per period" in the employee master file (divided the salary field by 12 to derive the monthly pay).It was found that for two employees these calculations did not match.Employee #20 had a pay of $200 higher than the calculation,while employee #220 had a pay that was $65 higher than the calculations.
3.Checked that "gross pay" less "unemployment insurance,Canada Pension Plan and income taxes deducted" equals "net pay." No errors were found.
Required:
For each audit test:
i)Describe the audit assertion associated with your audit test.
ii)Discuss the results that the auditor would have expected before running the test.
iii)Discuss the implications of the findings on the audit process or on specific audit procedures.

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Definitions:

Profit Sharing

A company policy where a portion of the company's profits is distributed to its employees, often based on their performance or seniority.

Lump-Sum Bonus

A one-time payment given to an employee in addition to their regular salary, often as a reward for performance, achievement, or as part of benefits.

Cafeteria Plan

A type of employee benefit plan that allows workers to choose from a variety of pre-tax benefit options to design a benefits package that best meets their needs.

Benefits Plan

A range of employee benefits offered by employers, including health insurance, retirement plans, and paid time off.