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The Trolley Dodgers Case Study

Trolley Dodgers case QUESTIONS 1. Identify the key audit objectives for a client’s payroll function. Comment on both objectives related to tests of controls and those related to substantive audit procedures. Answer: The key audit objectives are occurrence and existence, completeness, accuracy, posting & summarization, presentation and disclosure, timing and classification. Because “completeness” objectives means there is a need to check all of the amounts paid to employees when the big amounts involved in the payroll, so, for a client’s payroll function, in this situation, “completeness” objectives should be considered. Auditors should level the control risk on all payroll transection cycle which is auditors’ major objective on performing tests of controls. In order to determine the nature, extent, and timing of the year-end substantive tests auditors need to assess control risk for a transaction cycle to get strong evidences. A payroll transaction cycle has two key accounts which are accrued payrolls and

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