Question 1

The purpose of segregating the duties of distributing payroll checks and hiring personnel is to separate the

Accepted Answer

A)  duties within the accounting function. 
B)  custody of assets from the accounting for those assets. 
C)  authorization of transactions from the custody of related assets. 
D)  operational responsibility from record keeping responsibility. 
A)  duties within the accounting function. 
B)  custody of assets from the accounting for those assets. 
C)  authorization of transactions from the custody of related assets. 
D)  operational responsibility from record keeping responsibility. C

Question 2

Tests of details of transactions are often conducted in conjunction with tests of controls.

Accepted Answer

A) True 
 B)False  True

Question 3

An effective system of internal control over the payroll function would include

Accepted Answer

A)  verification of agreement of job time tickets with employee clock card hours by a payroll department employee. 
B)  reconciliation of totals on job time tickets with job reports by employees responsible for those specific jobs. 
C)  custody of rate authorization records by the supervisor of the payroll department. 
D)  preparation of payroll transaction journal entries by an employee who reports to the supervisor of the human resource department. 
A)  verification of agreement of job time tickets with employee clock card hours by a payroll department employee. 
B)  reconciliation of totals on job time tickets with job reports by employees responsible for those specific jobs. 
C)  custody of rate authorization records by the supervisor of the payroll department. 
D)  preparation of payroll transaction journal entries by an employee who reports to the supervisor of the human resource department. A

Question 4

Generally,is the inherent risk level for the human resource management process set at low,moderate or high? For what area of the process might the appropriate level differ from the previous answer? Why?

Accepted Answer

Inherent risk is normally set low for th

Question 5

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

Accepted Answer

A)  all unclaimed payroll checks are properly returned to the cashier. 
B)  the paymaster is not involved in the distribution of payroll checks. 
C)  all employees have in their possession proper employee identification. 
D)  names on the company payroll are those of bona fide employees presently on the job. 
A)  all unclaimed payroll checks are properly returned to the cashier. 
B)  the paymaster is not involved in the distribution of payroll checks. 
C)  all employees have in their possession proper employee identification. 
D)  names on the company payroll are those of bona fide employees presently on the job.

Question 6

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.

Accepted Answer

1)Time sheet.
2)Payr

Question 7

Which of the following circumstances most likely would cause an auditor to suspect an employee payroll fraud scheme?

Accepted Answer

A)  There are significant unexplained variances between standard and actual labor cost. 
B)  Payroll checks are disbursed by the same employee each payday. 
C)  Employee time sheets are approved by individual departmental supervisors. 
D)  A separate payroll bank account is maintained on an imprest basis. 
A)  There are significant unexplained variances between standard and actual labor cost. 
B)  Payroll checks are disbursed by the same employee each payday. 
C)  Employee time sheets are approved by individual departmental supervisors. 
D)  A separate payroll bank account is maintained on an imprest basis.

Question 8

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

Accepted Answer

A)  observe the segregation of duties concerning human resource responsibilities and payroll disbursement. 
B)  inspect evidence that all prenumbered payroll checks are accounted for. 
C)  recompute the payroll deductions for employee fringe benefits. 
D)  verify the preparation of the monthly payroll account bank reconciliation. 
A)  observe the segregation of duties concerning human resource responsibilities and payroll disbursement. 
B)  inspect evidence that all prenumbered payroll checks are accounted for. 
C)  recompute the payroll deductions for employee fringe benefits. 
D)  verify the preparation of the monthly payroll account bank reconciliation.

Question 9

Key segregations of duties in the human resource management process include all of the following except:

Accepted Answer

A)  the supervision function should be separate from the payroll-processing function. 
B)  the disbursement function should be separate from the supervision function. 
C)  the human resource function should be separate from setting salaries. 
D)  the payroll-processing function should be separate from the general ledger function. 
A)  the supervision function should be separate from the payroll-processing function. 
B)  the disbursement function should be separate from the supervision function. 
C)  the human resource function should be separate from setting salaries. 
D)  the payroll-processing function should be separate from the general ledger function.

Question 10

When examining payroll transactions,an auditor is primarily concerned with the possibility of

Accepted Answer

A)  underpayments and properly authorized payments. 
B)  posting of gross payroll amounts to incorrect salary expense accounts. 
C)  misfootings of employee time records. 
D)  excess withholding of amounts required to be withheld.
AICPA: BB Industry
AICPA: FN Risk Analysis
Accessibility: Keyboard Navigation 
A)  underpayments and properly authorized payments. 
B)  posting of gross payroll amounts to incorrect salary expense accounts. 
C)  misfootings of employee time records. 
D)  excess withholding of amounts required to be withheld.
AICPA: BB Industry
AICPA: FN Risk Analysis
Accessibility: Keyboard Navigation

Question 11

FASB ASC Topic 715 requires specific disclosures regarding human resources,which of course must be verified and audited by the CPA.What are those disclosures?

Accepted Answer

FASB ASC Topic 715 requires significant

Question 12

In the weekly computer run to prepare payroll checks,a check was printed for an employee who had been terminated the previous week.Which of the following controls,if properly utilized,would have been most effective in preventing the error or ensuring its prompt detection?

Accepted Answer

A)  A control total for hours worked, prepared from time sheets collected by the Timekeeping Department. 
B)  Requiring the treasurer's office to account for the numbers of the prenumbered checks issued to the EDP department for the processing of the payroll. 
C)  Use of a check digit for employee numbers. 
D)  Use of a header label for the payroll input sheet. 
A)  A control total for hours worked, prepared from time sheets collected by the Timekeeping Department. 
B)  Requiring the treasurer's office to account for the numbers of the prenumbered checks issued to the EDP department for the processing of the payroll. 
C)  Use of a check digit for employee numbers. 
D)  Use of a header label for the payroll input sheet.

Question 13

Explain how the human resource management process can affect the financial statements.

Accepted Answer

The main human resource transaction that

Question 14

If the results of the control tests do not support the planned level of control risk,the detection risk will have to be set higher.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A)  The Human Resource department promptly sends employee termination notices to the payroll supervisor. 
B)  Employees who distribute payroll checks forward unclaimed payroll checks to the absent employees' supervisors. 
C)  Salary rates resulting from new hires are approved by the payroll supervisor. 
D)  Total hours used for determination of gross pay are calculated by the payroll supervisor. 
A)  The Human Resource department promptly sends employee termination notices to the payroll supervisor. 
B)  Employees who distribute payroll checks forward unclaimed payroll checks to the absent employees' supervisors. 
C)  Salary rates resulting from new hires are approved by the payroll supervisor. 
D)  Total hours used for determination of gross pay are calculated by the payroll supervisor.

Question 16

In an IT payroll system environment,an auditor would be least likely to use test data to test controls related to

Accepted Answer

A)  missing employee numbers. 
B)  proper approval of overtime by supervisors. 
C)  time sheets with invalid job numbers. 
D)  agreement of hours per clock cards with hours on time sheets. 
A)  missing employee numbers. 
B)  proper approval of overtime by supervisors. 
C)  time sheets with invalid job numbers. 
D)  agreement of hours per clock cards with hours on time sheets.

Question 17

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?

Accepted Answer

A)  Classification. 
B)  Occurrence. 
C)  Cutoff. 
D)  Valuation. 
A)  Classification. 
B)  Occurrence. 
C)  Cutoff. 
D)  Valuation.

Question 18

A substantive test of transactions to test the completeness assertion includes

Accepted Answer

A)  tracing a sample of time sheets to the payroll register. 
B)  testing a sample of payroll checks for the presence of an authorized time sheet. 
C)  testing postings to the payroll register for a sample of payroll checks. 
D)  recomputing the accuracy of a sample of payroll checks. 
A)  tracing a sample of time sheets to the payroll register. 
B)  testing a sample of payroll checks for the presence of an authorized time sheet. 
C)  testing postings to the payroll register for a sample of payroll checks. 
D)  recomputing the accuracy of a sample of payroll checks.

Question 19

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

Accepted Answer

A)  uncashed payroll checks were issued to employees who have not been terminated. 
B)  personnel files are kept up to date. 
C)  employees who have not been terminated receive their payroll checks. 
D)  terminated employees are removed from the payroll. 
A)  uncashed payroll checks were issued to employees who have not been terminated. 
B)  personnel files are kept up to date. 
C)  employees who have not been terminated receive their payroll checks. 
D)  terminated employees are removed from the payroll.

Question 20

Which of the following activities most likely would detect whether payroll data are accurately processed?

Accepted Answer

A)  Monitor authorized distribution of data control sheets. 
B)  Use test data to verify the accurate performance of payroll processing. 
C)  Examine source documents for approval by supervisors. 
D)  Segregate duties between approval of hardware and software specifications. 
A)  Monitor authorized distribution of data control sheets. 
B)  Use test data to verify the accurate performance of payroll processing. 
C)  Examine source documents for approval by supervisors. 
D)  Segregate duties between approval of hardware and software specifications.

The purpose of segregating the duties of distributing payroll checks and hiring personnel is to separate the

Tests of details of transactions are often conducted in conjunction with tests of controls.

An effective system of internal control over the payroll function would include

Generally,is the inherent risk level for the human resource management process set at low,moderate or high? For what area of the process might the appropriate level differ from the previous answer? Why?

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 circumstances most likely would cause an auditor to suspect an employee payroll fraud scheme?

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

Key segregations of duties in the human resource management process include all of the following except:

When examining payroll transactions,an auditor is primarily concerned with the possibility of

FASB ASC Topic 715 requires specific disclosures regarding human resources,which of course must be verified and audited by the CPA.What are those disclosures?

In the weekly computer run to prepare payroll checks,a check was printed for an employee who had been terminated the previous week.Which of the following controls,if properly utilized,would have been most effective in preventing the error or ensuring its prompt detection?

Explain how the human resource management process can affect the financial statements.

If the results of the control tests do not support the planned level of control risk,the detection risk will have to be set higher.

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

In an IT payroll system environment,an auditor would be least likely to use test data to test controls related to

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?

A substantive test of transactions to test the completeness assertion includes

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

Which of the following activities most likely would detect whether payroll data are accurately processed?

An Introduction to Assurance and Financial Statement Auditing

The Financial Statement Auditing Environment

Audit Planning, Types of Audit Tests, and Materiality

Risk Assessment

Evidence and Documentation

Internal Control in a Financial Statement Audit

Auditing Internal Control Over Financial Reporting

Audit Sampling: An Overview and Application to Tests of Controls

Audit Sampling: An Application to Substantive Tests of Account Balances

Auditing the Revenue Process

Auditing the Purchasing Process

Auditing the Inventory Management Process

Auditing the Financinginvesting Process: Prepaid Expenses, Intangible Assets, and Property, Plant, and Equipment

Auditing the Financinginvesting Process: Long-Term Liabilities, Stockholders Equity, and Income Statement Accounts

Auditing the Financinginvesting Process: Cash and Investments

Completing the Audit Engagement

Reports on Audited Financial Statements

Professsional Conduct,Independence,and Quality Control

Legal Liability

Assurance,Attestation,amd Internal Auditing Services-professional Judgement Module

Filters

Exam 12: Auditing the Human Resource Management Process

The purpose of segregating the duties of distributing payroll checks and hiring personnel is to separate the

Tests of details of transactions are often conducted in conjunction with tests of controls.

An effective system of internal control over the payroll function would include

Generally,is the inherent risk level for the human resource management process set at low,moderate or high? For what area of the process might the appropriate level differ from the previous answer? Why?

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 circumstances most likely would cause an auditor to suspect an employee payroll fraud scheme?

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

Key segregations of duties in the human resource management process include all of the following except:

When examining payroll transactions,an auditor is primarily concerned with the possibility of

FASB ASC Topic 715 requires specific disclosures regarding human resources,which of course must be verified and audited by the CPA.What are those disclosures?

In the weekly computer run to prepare payroll checks,a check was printed for an employee who had been terminated the previous week.Which of the following controls,if properly utilized,would have been most effective in preventing the error or ensuring its prompt detection?

Explain how the human resource management process can affect the financial statements.

If the results of the control tests do not support the planned level of control risk,the detection risk will have to be set higher.

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

In an IT payroll system environment,an auditor would be least likely to use test data to test controls related to

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?

A substantive test of transactions to test the completeness assertion includes

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

Which of the following activities most likely would detect whether payroll data are accurately processed?

An Introduction to Assurance and Financial Statement Auditing

The Financial Statement Auditing Environment

Audit Planning, Types of Audit Tests, and Materiality

Risk Assessment

Evidence and Documentation

Internal Control in a Financial Statement Audit

Auditing Internal Control Over Financial Reporting

Audit Sampling: An Overview and Application to Tests of Controls

Audit Sampling: An Application to Substantive Tests of Account Balances

Auditing the Revenue Process

Auditing the Purchasing Process

Auditing the Inventory Management Process

Auditing the Financinginvesting Process: Prepaid Expenses, Intangible Assets, and Property, Plant, and Equipment

Auditing the Financinginvesting Process: Long-Term Liabilities, Stockholders Equity, and Income Statement Accounts

Auditing the Financinginvesting Process: Cash and Investments

Completing the Audit Engagement

Reports on Audited Financial Statements

Professsional Conduct,Independence,and Quality Control

Legal Liability

Assurance,Attestation,amd Internal Auditing Services-professional Judgement Module

Filters