Once again, assume the role of senior auditor on the Genetech engagement assigned to perform tests over the Human Resources Cycle. In designing tests, you are concerned with management’s objectives and the associated risks with the payroll function.
(a) What are management’s objectives related to the payroll function?
(b) What is the primary difference in the payroll function of a service company compared to that of a manufacturing company?
(c) What role does the government play in a company’s payroll cycle?
(d) Why is the period-end so important to proper financial reporting and what should you be concerned with as the auditor?