Substantive Procedures for Directors' Bonuses Flashcards
Obtain a schedule…
Obtain a schedule of the directors’ bonus and cast the schedule to ensure its accuracy. Agree amount to that disclosed in FSs
Review the schedule…
Review the schedule of current liabilities and confirm the bonus accrual is included as year-end liability
Agree individual bonus payments…
Agree the individual bonus payments to post year-end payroll records
Recalculate the bonus payments…
Recalculate the bonus payments and agree the criteria to supporting documentation and percentage rates to be paid to the directors’ service contracts
Confirm the amount of each bonus…
Confirm the amount of each bonus paid by agreeing post-year end cash book and bank statements
Compare the profit before tax…
Compare profit before tax used in bonus calculation to final profit before tax figure to confirm whether any adjustment is required to bonus paid and discuss any differences with management
Agree the amounts paid…
Agree the amounts paid to each director to board minutes and contracts to ensure amounts included in current year FSs are fully accrued and disclosed
Review the board minutes…
Review board minutes to identify whether any additional payments relating to this year have been agreed for any directors
Obtain a written…
Obtain a written representation from management confirming the completeness of directors’ renumeration including the bonus
Review the disclosures…
Review the dislosures made regarding the bonus paid to directors and assess whether these are in compliance with local legislation
