Payroll

Question 1

What are some potential problems that an auditor should be aware of when looking at payroll information?

Answer 1

paying for more hours than actually worked

paying for incorrect rates

money deducted from one employee’s check and added to another

checks may be produced for phantom or fictitious employees

checks produced for employees who have quit or been fired

unauthorized deductions from paychecks

Question 2

In a payroll system, what is the function of the HR department?

Answer 2

maintains employee records

conducts hiring and terminations of all employees

authorizes all pay rates and updates

handles all payroll deductions and updates

Question 3

In a payroll system, what is the function of the timekeeping department?

Answer 3

determines the number of hours or fixed amount to be paid to employees

Question 4

In a payroll system, what is the function of the payroll department?

Answer 4

computes gross wages, deductions, and net wages

Question 5

In a payroll system, what is the function of the paymaster?

Answer 5

controls the paychecks that are prepared and distributes them to the employees