WAGES AND SALARIES

Substantive tests may be conducted, as follows:

Wages

(a) Check gross pay with approved pay rate;
(b) Check calculation of gross pay with number of hours worked;
(c) Check that extra hours such as overtime is properly authorised;
(d) Check calculation of approved deductions;
(e) Trace deductions to check-off ledgers;
(f) Check totals of wage sheets to wages summary;
(g) Check additions in the summary sheet;
(h) Check posting of summary sheet total to wages nominal ledger;
(i) Check net cash payments to cash book;
(j) Check that there is proper approval for wage payment; and
(k) Verify that there is adequate procedure for the treatment of
unclaimed wages and ensure that this is properly complied with.

Salaries

(a) Verify that the engagement of new employees and discharges
have been carried out in line with the organisation’s policies;
(b) Check gross salaries to employee records;
(c) Verify proper authorisation of overtime;
(d) Check calculation of employee salaries including re-computation
of deductions;
(e) Confirm receipt of cash paid to employees;
(f) Confirm payment of salaries through bank transfers to employees;
(g) Re-compute payroll sheet;
(h) Trace totals of salary sheets to summaries;
(i) Check additions of summary sheet;
(j) Trace summary sheet total to nominal ledger;
(k) Trace total of net pay to cash book;
(l) Trace total of deductions to check-off accounts; and
(m) Verify that there is proper approval for the payment of salaries.

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