Part (c) for 6 marks required substantive procedures to confirm the completeness and accuracy of the payroll expense. On the whole candidates performed well in this area.

A good proportion of candidates were able to suggest practical payroll procedures such as analytical review of prior year and current year charges or undertaking a proof in total calculation. Other common answers included recalculation of a sample of payroll calculations or statutory deductions.

Common mistakes made by candidates were: 
• Giving objectives rather than procedures “ensure that the gross and net pay calculations are correct”, this is not a detailed substantive procedure and so would not score any marks. 
• Lack of detail in tests such as “check that the payroll calculations are correct”, this would not score any marks as it does not explain what should be checked or how this testing would be carried out. 
• Providing tests of controls rather than substantive procedures, such as focusing on authorisation of payroll.

The requirement verb was to “describe” therefore sufficient detail was required to score the 1 mark available per test. Candidates are reminded yet again that substantive procedures are a core topic area and they must be able to produce relevant detailed procedures and to apply their knowledge to different areas of the financial statements.