Exam 15: Audit of the Human Resources and Payroll Cycle

In most audits, the amounts of the balance sheet accounts related to payroll are

Which of the following is an example of semi-permanent information that would be included in personnel records?

Which of the following controls prevents error and helps to ensure that only authorized wages are paid by the payroll service provider?

As part of your audit of the payroll for Jones Chu Company Limited (JCC), you used generalized audit software. You had available to you the payroll transactions for the month of September and the employee master file as of September 30. You conducted the following tests, with results noted: 1. Ran a duplicates test on employee number in the transaction file. You found that one employee, employee #320, had been paid twice, using cheque numbers 12376 and 12377. 2. Checked the calculation of "pay per period" in the employee master file (divided the salary field by 12 to derive the monthly pay). It was found that for two employees these calculations did not match. Employee #20 had a pay of $200 higher than the calculation, while employee #220 had a pay that was $65 higher than the calculations. 3. Checked that "gross pay" less "unemployment insurance, Canada Pension Plan and income taxes deducted" equals "net pay." No errors were found. Required: For each audit test: i) Describe the audit assertion associated with your audit test. ii) Discuss the results that the auditor would have expected before running the test. iii) Discuss the implications of the findings on the audit process or on specific audit procedures.

Which of the following controls best prevents employees from checking in for more than one employee?

A form issued for each employee summarizing the earnings record for the calendar year is the

Which of the following internal control tests would help to assess whether payroll transactions were properly classified?

When the employees are paid automatically by bank deposits to the employees' accounts, in an effort to identify potential fraud, the auditor can look for

Which of the following controls helps to prevent error with set up of access rights, and also helps to prevent unauthorized changes to the access rights?

Which of the following is a substantive test of transactions?

Otto decided to outsource the payroll function to Magna Plus. For the purpose of an assurance engagement, Magna is considered a

Otto decided to outsource the payroll function to Magna Plus. The controller of Otto should still

Master file data is the semi-permanent data in an employee's file. Changes to the master file

"Recorded payroll payments are for work actually performed by existing employees" is the control objective of

The human resources and payroll cycle is the transaction cycle that begins with

Access rights management is important because it is the organization's method of

The careful and timely preparation of all payroll withholdings and employer's portion of withholdings is necessary to avoid heavy fines. The most important control in the timely preparation of these returns is

A) Discuss three important differences between the human resources and payroll cycle and other cycles in a typical audit. B) Describe each of the six business functions in a typical human resources and payroll cycle. C) Describe each of the primary documents and records used in the timekeeping and payroll preparation function in the payroll and personnel cycle. D) Discuss each of the primary documents and records used in 1) the payment of payroll function, and 2) the preparation of employee withholdings and benefits remittance forms function in the payroll and personnel cycle.

Which of the following internal controls would assist in ensuring that recorded payroll transactions are for the amount of time actually worked and at the proper pay rate, and that withholdings are properly calculated?

Which of the following describes the class of transactions associated with payroll?