The owner of a small snack food and potato chip manufacturer, California Crunch Company, has asked you to investigate a possible issue with the company’s payroll. They have provided you with this year and last year’s income statements and two payroll files. The “HR Master” file gives you important information about each employee. The “Payroll” file details the company’s payroll for the last 5 pay periods of the year. You will be conducting some audit procedures for California Crunch and analyzing the results.
Review the income statements given to you by the owner of California Crunch Company. Based on the AICPA Code of Professional Conduct prepare a 2-3 page summary of how you plan to proceed to address the owner’s concerns and what specific steps you would take to audit this company.