Exam 13: Payroll and Production Processes

The purpose of segregating the duties of hiring personnel and distributing payroll cheques is to separate the ________.

Which of the following documents is NOT included in the payroll cycle?

To best ensure that employees are paid authorized rates, the auditor should trace wage rates from the ________.

A bill of materials is associated with which duty?

Cost accounting can be performed by those who also ________.

Only supervisors have physical custody of materials, equipment, and labour while the production work is performed.

One procedure in an audit program for tests of controls reads: "Select a sample of employees from the payroll register and vouch identification numbers, pay rates, and authorized deductions to the personnel files." This procedure is designed to test the validity of payroll information for employees.

The accounting department at Blue Manufacturing Limited receives production information at the end of each week. The production floor supervisor reports time and production data and the payroll department reports labour cost data. How will the accounting department use this information? Why?

Recalculating all costs entered on a sample of open and closed job cost reports is a test of the accuracy objective.

If controls over production accounting are found to be strong, an auditor can plan to do less testing over ________.

Selecting a sample of time clock cards and examining them for evidence of approval by a supervisor then tracing the hours recorded to the payroll registers is a procedure designed to obtain evidence about the control objective(s) of ________.

Tracing selected items from the payroll register to approved, employee time cards provides evidence that ________.

A materials requisition is the document that authorizes the inventory custodian to release raw materials and supplies to production personnel.

Overall production authorization starts with production planning, which usually is based on a sales forecast.

An auditor traces an employee's name, job category, and employee number to authorized personnel records. This provides evidence of

Selecting a sample of payroll summaries and vouching the details to time records is a procedure designed to test the control objective of ________.

A test of the validity objective is to examine a sample of production cost reports and recalculate all costs entered.

The payroll register is the primary original record for payroll accounting.

Federal Form T4 Summary is the employer's annual federal employee remittance return.

It is permissible for accounting personnel to authorize production orders since they do not have custody of the assets.