The following questions are included in Figure 10-3:

1. Are hirings, pay rates, payroll deductions, and terminations a:t thorized in writing by the personnel department?

2. Are payroll deduction authorizations signed by employees and filed in personnel records?

3. Are time clocks and clock cards used and is punching of cards supervised?

4. Is there supervisory approval of time worked by each employee?

5. Is there independent internal verification of gross earnings, payroll deductions, and net pay?

6. Is there supervisory approval of the payroll?

7. Are payroll checks signed and distributed by treasurer office personnel?

8. Is employee identification and/or a signed receipt required on payment?

9. Are unclaimed wages controlled by a responsible treasurer office supervisor?

10. Are independent comparisons made of the agreement of entries with payroll summaries and tax returns?

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a. Identify the internal accounting control objective to which each question relates (i.e., executing, recording, or custody).

b. Identify the function and specific internal control objective to which the question pertains.

c. Indicate the internal accounting control principle that is involved.

d. Identify an error or irregularity that may result from a "No" answer to each question.

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INTERNAL CONTROL QUESTIONNAIRE Cycle: Expenditure Class of transactions: Payroll Executing Transactions Is there proper segregation of duties in executing payroll transactions? Are hirings, pay rates, payroll deductions and terminations authorized in writing by the personnel department? Are payroll deduction authorizations signed by employees and filed in per- sonnel records? Are time clocks and clock cards used and is punching of cards supervised? Is there supervisory approval of time worked by each employee? Are time tickets reconciled to clock card hours daily? Is there independent internal verification of gross earnings, payroll deduc- tions, and net pay? Is there supervisory approval of the payroll? Are payroll checks signed and distributed by treasurer office personnel? Is employee identification and/or a signed receipt required on payment? Is a payroll bank account used for payroll checks? Are payroll tax returns filed and paid when due? Recording Transactions Are personnel who journalize payroll transactions independent of preparing and paying the payroll? Are independent comparisons made of the agreement of entries with payroll summaries and tax returns? Are cost accounting calculations reconciled with production records? Maintaining Custody of Are unclaimed wages controlled by a responsible treasurer office supervisor? Is the payroll bank account regularly reconciled by an independent person? Figure 10-3. INTERNAL CONTROL QUESTIONNAIRE: PAYROLL TRANSACTIONS