Set tolerable misstatement and assess inherent risk Phase I FIGURE 17-3 for payroll liability accounts Methodology for Assess control risk Designing Tests of payre Phase I personnel cycle Details of balances for Payroll Liabilities Design and perform tests of controls and substantive tests of transactions for the Phase ll payroll and personnel cycle Design and perform analyti procedures for the PhaseⅢl payroll and personnel cycle Design tests of details Audit procedures of payroll accounts balances Sample si o satIs Items to select Phase ll Loebbecke, Auditing, 8/E related audit objectives TimingArens, Loebbecke; Auditing, 8/E ©2000 Prentice Hall, Inc. FIGURE 17 - 3 Methodology for Designing Tests of Details of Balances for Payroll Liabilities