During your audit of Fletcher Corporation's June 30, 1999, financial statements, you become aware of the following control procedures over Fletcher's personnel and payroll activities:

1. All substantive information in employment applications is thoroughly checked and verified before offering an employment contract.

2. Authorized pay rates are maintained in personnel files for each employee.

3. All Personnel and Payroll Department procedures are clearly written in updated procedures manuals.

4. Dual signatories are required for all paychecks exceeding $1,200.

5. Procedures are established for charging direct labor hours to appropriate jobs.

6. Responsibility for authorizing, executing, and recording payroll is vested in separate personnel.

Required: 

For each control procedure, indicate:

(a) a potential error or fraud that might be prevented or detected as a result of the control procedure, and

(b) the control objective served by the control procedure. Organize your answer as follows;

Transcribed Image Text:

Control Procedure 1. Potential Error or Fraud That Might Be Prevented or Detected (a) Control Objective (b)