Butler, CPA, has been engaged to audit the financial statements of Young Computer Outlets, Inc., a new client. Young is a privately-owned chain of retail stores that sells a variety of computer software and video products. Young uses an in-house payroll department at its corporate headquarters to compute payroll data, and to prepare and distribute payroll checks to its 300 salaried employees.

Butler is preparing an internal control questionnaire to assist in obtaining an understanding of Young's internal control and in assessing control risk.

Required:

Prepare a "Payroll" segment of Butler's internal control questionnaire that would assist in obtaining an understanding of Young's internal control and in assessing control risk.

Do not prepare questions relating to cash payrolls, EDP applications, payments based on hourly rates, piecework, commissions, employee benefits (pensions, health care, vacations, etc.), or payroll tax accruals other than withholdings.

Use the format in the following example:

Question Are paychecks prenumbered and accounted for?