Exam 12: Auditing the Human Resource Management Process

An auditor would consider internal control over an entity's payroll procedures to be ineffective if the payroll department supervisor is responsible for:

In determining the effectiveness of an entity's policies and procedures relating to the existence or occurrence assertion for payroll transactions, an auditor most likely would inquire about and:

Which of the following could test the assertion of cutoff for payroll-related liabilities?

Tracing a sample of time sheets before and after period end to the weekly payroll report and tracing the weekly payroll report to the general ledger to verify that payroll transactions are recorded in the proper period would provide evidence primarily for which assertion?

An auditor most likely would extend substantive tests of payroll when:

In performing tests concerning the granting of stock options, an auditor should:

The proper use of prenumbered termination notice forms by the Payroll Department should provide assurance that all:

Which of the following internal control activities could best prevent direct labor from being charged to manufacturing overhead?

The payroll-processing function is responsible for paying employees for services and benefits.

In testing the payroll of a large company, the auditor wants to establish that the individuals included in a sample actually were employees of the company during the period under review. What will be the best source to determine this?

Which of the following could test the existence assertion for payroll-related liabilities?

Which of the following is the best reason why an auditor should consider observing an entity's distribution of regular payroll checks?

Listed below are descriptions of various types of documents used in the payroll process. Identify the document being described for each of the following: 1)The document used to record hours worked by an employee. 2)The document that summarizes all payroll payments issued to employees. 3)The document that contains information on an employee's work history. 4)The form used to authorize deductions from an employee's pay. 5)The computer file that contains all the entity's records related to payroll.

A large retail enterprise has established a policy that requires that the paymaster deliver all unclaimed payroll checks to the Internal Auditing Department at the end of each payroll distribution day. This policy was most likely adopted in order to:

During the current year being audited, Hitech, Inc. changed from a conventional payroll punch clock to a computerized payroll time system. Factory employees now record time in and out with magnetic cards and the IT system automatically updates all payroll records. Because of this change:

Which of the following is a control activity that most likely could help prevent employee payroll fraud?

A surprise observation by an auditor of an entity's regular distribution of paychecks is primarily designed to satisfy the auditor that:

Which of the following procedures would normally be performed by the auditor when conducting tests of payroll transactions?