Auditing

i think its visible

EP 13-1 Internal Control Questionnaire Items, Mis- E_ statements That Could Occur from Control Weaknesses. LO5, 6 Refer to the internal con- trol questionnaire on a payroll system (Appendix 13A, Exhibit 13A-1) and assume that the answer to each question is no." Required: Prepare a table matching each question to an error or fraud that could occur because of the absence of the control. Your column headings should be as follows: Question Possible Error or Fraud Due to Weakness EXHIBI Internal Control Questionnaires Auditor Responses INTERNAL CONTROL QUESTIONNAIRE FOR PAYROLL ACCOUNTING PROCESS AUOITEE FS PERIOD PROCESS: Payrol OVERALL COMPANY-LEVEL CONTROL AND CONTROL ACTIVITIES ASSESSMENT Refer to responses recorded for questions in Appendix 9A. Exhibit 9A-1.) APPLICATION CONTROL ASSESSMENTS AYROLL APPLICATION CONTROLS Environment and General Controls Relevant to This Application: 1. Are al employees paid by cheque or direct deposit to their bank accounts 2. a special payroll bank account is used, is the payroll bank account reconciled by someone who does not prepare, sign, or deliver paycheques? 3. Are payroll cheques signed by persons who neither prepare cheques nor keep cash funds or accounting records? 4 an outside payroll processing service is used, is the list of employees paid by the service reviewed by the employees supervisor or someone else who cannot add or make changes to the employee payroll list submitted to the processing service? 5. Are payroll department personnel rotated in their duties? required to take vacations? bonded? 6. Is the timekeeping department (function independent of the payroll department? Application Control Assessments: Consider whether the auditee has appropriate policies and procedures in place to meet the following control objectives Volidity objective: 7. Are names of terminated employees reported in writing to the payroll department? 8. Is the payroll periodically compared with personnel files? 9. Are cheques distributed by someone other than the employee's immediate supervisor? 10. Are unclaimed wages controlled by a responsible officer? 11. Do internal auditors conduct occasional surprise distributions of paycheques, or for direct deposit payroll do they conduct random verification of the existence of a sample of current employees who are included on the payroll register? Completeness objective: 12. Are names of newly hired employees reported in writing to the payroll department? 13. Are blank payroll cheques prenumbered and the numerical sequence checked for missing documents? re: Payroll Process (continued) Internal Authorization objective: 15. Are authorizations for deductions, signed by the employees, on file? 14. Are all wage rates determined by contract or approved by a personnel ? 18. Is the payroll register sheet signed by the employee preparing it and approved to 17. is a secure time clock and time recording system used to record hours worked by 16 Are time cards or piecework reports prepared by the employee approved by the 19. Are timekeeping and cost accounting records (such as hours, dollars) reconciled with department calculations of hours and wages? 20. Are payrolls audited periodically by internal auditors? Accuracy objective: Classification objective: 21. Do payroll accounting personnel have instructions for classifying payroll debit entries 2 Are payroll records reconciled with government tax reports (0.9. T4 summary? Proper period objective: 23. Are monthly, quarterly, and annual wage accruals reviewed by an accounting officer? Auditor's conclusion on the effectiveness of application controls in the payroll accounting process. Precare EP 13-1 Internal Control Questionnaire Items, Mis- E_ statements That Could Occur from Control Weaknesses. LO5, 6 Refer to the internal con- trol questionnaire on a payroll system (Appendix 13A, Exhibit 13A-1) and assume that the answer to each question is no." Required: Prepare a table matching each question to an error or fraud that could occur because of the absence of the control. Your column headings should be as follows: Question Possible Error or Fraud Due to Weakness EXHIBI Internal Control Questionnaires Auditor Responses INTERNAL CONTROL QUESTIONNAIRE FOR PAYROLL ACCOUNTING PROCESS AUOITEE FS PERIOD PROCESS: Payrol OVERALL COMPANY-LEVEL CONTROL AND CONTROL ACTIVITIES ASSESSMENT Refer to responses recorded for questions in Appendix 9A. Exhibit 9A-1.) APPLICATION CONTROL ASSESSMENTS AYROLL APPLICATION CONTROLS Environment and General Controls Relevant to This Application: 1. Are al employees paid by cheque or direct deposit to their bank accounts 2. a special payroll bank account is used, is the payroll bank account reconciled by someone who does not prepare, sign, or deliver paycheques? 3. Are payroll cheques signed by persons who neither prepare cheques nor keep cash funds or accounting records? 4 an outside payroll processing service is used, is the list of employees paid by the service reviewed by the employees supervisor or someone else who cannot add or make changes to the employee payroll list submitted to the processing service? 5. Are payroll department personnel rotated in their duties? required to take vacations? bonded? 6. Is the timekeeping department (function independent of the payroll department? Application Control Assessments: Consider whether the auditee has appropriate policies and procedures in place to meet the following control objectives Volidity objective: 7. Are names of terminated employees reported in writing to the payroll department? 8. Is the payroll periodically compared with personnel files? 9. Are cheques distributed by someone other than the employee's immediate supervisor? 10. Are unclaimed wages controlled by a responsible officer? 11. Do internal auditors conduct occasional surprise distributions of paycheques, or for direct deposit payroll do they conduct random verification of the existence of a sample of current employees who are included on the payroll register? Completeness objective: 12. Are names of newly hired employees reported in writing to the payroll department? 13. Are blank payroll cheques prenumbered and the numerical sequence checked for missing documents? re: Payroll Process (continued) Internal Authorization objective: 15. Are authorizations for deductions, signed by the employees, on file? 14. Are all wage rates determined by contract or approved by a personnel ? 18. Is the payroll register sheet signed by the employee preparing it and approved to 17. is a secure time clock and time recording system used to record hours worked by 16 Are time cards or piecework reports prepared by the employee approved by the 19. Are timekeeping and cost accounting records (such as hours, dollars) reconciled with department calculations of hours and wages? 20. Are payrolls audited periodically by internal auditors? Accuracy objective: Classification objective: 21. Do payroll accounting personnel have instructions for classifying payroll debit entries 2 Are payroll records reconciled with government tax reports (0.9. T4 summary? Proper period objective: 23. Are monthly, quarterly, and annual wage accruals reviewed by an accounting officer? Auditor's conclusion on the effectiveness of application controls in the payroll accounting process. Precare