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Accrued liabilities <br />Long-term debt <br />Compensated absences <br />Recalculate accrued salaries and wages payable by gaining an <br />understanding of the timing of service periods and pay dates, <br />obtaining support for the first pay date in the subsequent <br />period, determining the number of service days covered by the <br />pay run and the number of service days during the period <br />under audit, recalculating the accrual. <br />Recalculate the accrual for the employer's share of FICA taxes <br />payable based on known rate of 7.65%. <br />Consider the reasonableness of other fringe benefit accruals <br />such as health insurance, retirement, and workers' <br />compensation. <br />For self-insurance programs, obtain calculations or third -party <br />reports estimating incurred -but -not -report claims. Rollforward <br />self-insurance claims payable for disclosure in the footnotes. <br />Obtain a rollforward of long-term debt activity. Compare the <br />beginning balances to the prior year audit. <br />Obtain amortization schedules for bonds and notes payable. <br />Consider whether any debt covenants exist and test <br />accordingly. <br />Trace principal payments to the debt rollforward and the <br />amortization schedules. <br />Agree the current portion of long-term debt and future <br />minimum payments of principal and interest to the <br />amortization schedules. <br />Determine whether new debt was approved by the governing <br />body and issued in accordance with State statute. <br />Determine whether there were premiums and/or discounts <br />associated with the issuance of the debt by obtaining the <br />sources and uses statement. Consider whether any bond <br />issuance costs should be capitalized and amortized over the <br />life of the bonds. Recalculate such balances. <br />Recalculate accrued interest payable based on the first interest <br />payable of the subsequent period, the length of time covered by <br />this interest payment, and the length of time within the year <br />under audit. <br />Obtain a detailed listing of compensated absences (accrued <br />sick and vacation time) by employee and agree to general <br />ledger control accounts. <br />Obtain an understanding of compensated absences policies, <br />such as vesting, payment rates, and maximum payouts. <br />Select a sample of individuals for testing. Trace accrued hours <br />to source files and pay rates to personnel files or <br />union/bargaining unit contracts. Recalculate accrual and <br />determine whether hours are within the maximum amount. <br />