Audit Program Design Part Ii Essay
January 31, 2011
At Anderson, Olds, and Watershed, we have developed the following test of controls, substantive test of transactions, and analytical procedures for the audit of the sales and collection cycle, the payroll and personnel cycle, and the acquisition and payment cycle of Apollo Shoe Company. The tests are consistent with generally accepted auditing methods in The United States of America. The tests will be designed to prove existence, completeness, and accuracy. Please take the time to look over the proposed tests and techniques and feel free to ask any questions regarding the tests that will be performed.
Sales and Collection Cycle
To test for existence, AOW will verify whether …show more content…
The purpose of the analytical procedures is to compare and contrast the methods used to ensure proper internal controls are in use for the payroll and personnel cycles. The following examples are designed to aid in reconciliation Compare payroll expense account balance to previous years (adjusted for pay rate increases and increases in volume.
• Compare direct labor as a percentage of sales with previous years.
• Compare payroll tax expense as a percentage of salaries and wages with previous years