QUESTION:

Payroll tems 1-8 below are selected questions typically found on an internal control questionnaire used by auditors in order to gain an understanding of the internal controls in the payroll and personnel cycle over hourly employees. In using the questionnaire, a "yes" response to a question indicates a possible internal control, whereas a "no" response indicates a potential deficiency. QUESTIONS: 1 Does an appropriate official authorize the initial rates of pay and any subsequent changes in pay rates? IN Are formal records such as time cards used for keeping time for hourly employees? 3 Is approval by a department head or supervisor required for all time cards before they are submitted for payment? 4 Does an adequate process exist to ensure proper coding of time records to specific jobs or products, such as work orders, job numbers, or some similar indentification provided by employees? Is the distribution of payments to employees independent of timekeeping? 6 Are employees required to show identification to receive a paycheck or are they required to use direct deposit? Are written notices documenting reasons for termination required? 8 Does anyone independently verify the payroll bank account reconcilation?For each question, complete the table below. Use the question numbers as the reference. (first one is done for you) Question Number Assertion being addressed by the control (assuming the asnwer to the question is "yes") Potential misstatement is answer is "no". Accuracy Employees are paid the wrong rate. N W 4 8