Tests of control for payroll at Turner Ltd Ben has identified a range of controls over payroll
Question:
Tests of control for payroll at Turner Ltd Ben has identified a range of controls over payroll at Turner Ltd, which operates a hotel in Wollongong NSW. Given seasonal variations around tourism, there is significant variation is staffing arrangements at Turner over the course of a year. Wages the major expense for Turner, especially in the warmer months when as many as 40 additional staff can be on the books. Ben has indicated that he wishes to rely on the internal controls around payroll for the audit and has identified the following features of the system: The operations manager at Turner keeps a weekly roster using excel which has the following information:
Name of staff member
Function of staff member (ie, bar/kitchen staff; cleaner, etc)
Hourly rate of pay
Days rostered for the week;
Andy additional pay amounts (meal allowances, uniform expenses, etc).
All employees require their supervisor to sign a printed copy of the excel sheet/roster every day to substantiate that the hours were worked as set out on the roster. If there are any variations then this is recorded on a separate 'variation form' which is signed by the both the employee and their supervisor.
The excel spreadsheet and the variation forms are forwarded to the payroll officer every Wednesday and are used as the basis for the payroll.
Question
The tests of control Ben will need to perform to provide evidence for the assertions of accuracy and occurrence of payroll expenses for Turner Ltd.
Auditing and Assurance Services
ISBN: 978-0077862343
6th edition
Authors: Timothy Louwers, Robert Ramsay, David Sinason, Jerry Straws