Question: Listed below is a selection of items from the payroll

Listed below is a selection of items from the payroll processing internal control questionnaire in Exhibit 13A–2.

1. Are names of terminated employees reported in writing to the payroll department?
2. Are authorizations for deductions, signed by the employees, on file?
3. Is the timekeeping department (function) independent of the payroll department?
4. Are timekeeping and cost accounting records (such as hours, dollars) reconciled with payroll department calculations of wage and salaries?

For each question:
a. Identify the control objective to which the question applies.
b. Specify one test of controls audit procedure an auditor could use to determine whether the control was operating effectively (see Exhibit 13–9 for procedures).
c. Using your business experience, your logic, and/or your imagination, and give an example of a misstatement caused by error or fraud that could occur if the control was absent orineffective.
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  • CreatedJanuary 09, 2015
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