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Accrued liabilities — 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 /> Long-term debt — 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 /> Compensated absences 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 /> 72 <br />