Morrison Company is a manufacturing company. The senior auditor described the essential characteristics of Morrison Companys internal
Question:
Supervisors do not review times cards prepared by employees.
Pay rates, hours, extensions and withholdings are not reviewed independently.
After being signed, paychecks are returned to department supervisors for distribution.
The company does not participate in direct deposits.
Required:
(a) Based on the information presented, what should auditors do in response to these weak controls and what effects could these weak payroll controls have on financial statements?
(b) What are some of the procedures that the auditors might apply in testing the payroll controls?
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Related Book For
Auditing and Assurance Services Understanding the Integrated Audit
ISBN: 978-0471726340
1st edition
Authors: Karen L. Hooks
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