wk 3 interm visit payroll

Question 1

changes to payroll are authorized by:

Answer 1

all authorized by rosie
jay runs rosie reviews

Question 2

change in pay

Answer 2

board discuss- rosie- jay input. rosie then checks

Question 3

restriction to payroll records

Answer 3

strong password
James pc- jay has unrestricted and unsupervised access. jay is annoyed at doing many hours potential control risk

Question 4

sepe of duties- payroll

Answer 4

jay preps
passed to rosie for auth
passed to james for auth
passed to rosie for prep journal
passed to mark for payment

Question 5

automated time keeping system

Answer 5

o No- potential control risk
 Manual, mistakes
 Managers must sign off on it, rosise checks it

Question 6

computerized time clock of calculating weekly pay

Answer 6

none, potential control risk

Question 7

calculation verification of payroll

Answer 7

manual, signed off by line manager, but no evidence caculations are checks- potential control risk

Question 8

hours worked

Answer 8

authroized by line manager

Question 9

bannk transfers to employees are authroiszed by two senior member of staff

Answer 9

auth by rosie and james
transfer by mark avon- cash book junior
potential control risk

Question 10

what is inherent risk associated with any pay roll

Answer 10

1. errors in payroll process- data entry incorrect, cac mistakes= incorrect employee compensation
2. fraudulent activities - who. how people do it (ghost employees, manipulating hours), = financial loss
3. compliance with laws and reg- tax laws, penalties fines
4. data secruity and confidentaly - leak personal employee detail = protect
5. compliance with internals= ineffective controls, bypassing

Question 11

assertions in payroll

Answer 11

existence and occurence
completeness
accruacy and valuation
rights and obligations
presnetations and disclosure

Question 12

main controls within the process of payroll

Answer 12

1. time and attendeance recording- could be done thorugh a computerized system e.g., id cards -rosie checks
2. payroll caculaton- line manager signs off, rosies cac wage and jay inputs- manual time sheets
3. review and approval of payroll- after cacuation goes under review and aprrov- jay, rosie
4. payment process - once apporived, mark puts through a bank transfer for staff salaries
5. record keeping- data backups

Question 13

5 payroll checks an auditor will do

Answer 13

1. cross-verification and attendeance data- payroll can do this, time sheets, help see inconsistency
2. reconcillation of payroll- payroll tax liablity- see payroll transaction are accruately reocrde in financial records, fs is reliable
3. payroll calcuation verification. - reg pay, overtime. auditr could select sample of employee and see if pay rate is right
4. deductions- benefits prem- check agasints legal docu to make sure its matched
5. employee details are right- going into right account (ghost employee)