Control Audit Specific Audit test
activities objectives misstatement
that is likely to be
prevented
1. Human resource Proper - Accuracy Qualified
policies require an authorization - Occurrence employees are
investigation of an of hired
employment transactions --> Minimizes the
application from and activities likelihood of
new employees. fraud and error
Investigation
includes checking
the employee's
background, former
employers, and
references.
2. Approval of - Adequate Occurrence Wages are - Check to see
department head or separation of correctly paid to that all
foreman on time duties existing employees that
records is required - Proper employees are punched in
before preparing authorization one day are
payroll. of physically
transactions present
and activities
3. All prenumbered Adequate Completeness All time records Tracing time
time records are documents are processed in record to entry
accounted for and records the payroll in the payroll
before beginning
data entry for
preparation of
payroll.
4. The payroll Independent Accuracy Gross pay and net Check gross pay
accounting software checks on pay are calculated with time
calculates gross and performance correctly records or other
net pay based on evidence of
hours inputted and hours worked
information in
employee master
files, and payroll
accounting
personnel
double-check the
mathematical
accuracy on a test
basis.
5. The payroll Proper Occurrence A paycheck is Check
accounting software authorization only processed employees from
application will not of for valid payroll to
accept data input transactions employees employees
for an employee and activities number master files
number not
contained in the
employee master
file.
6. Persons preparing Adequate Occurrence Only existing Observe the
the payroll do not separation of workers are paid process of
perform other duties distributing the
payroll duties (e.g., payroll check to
human resources or ensure that only
approval of time workers who
records) nor do they have ID receive
have access to wages packet
payroll data master
files or cash.
7. Written - Proper Occurrence Prevent an - Observe the
termination notices, authorization inappropriate process of
with properly of payroll check for distributing the
documented transactions former payroll check to
reasons for and activities employees is ensure that only
termination, and - Adequate prepared workers who
approval by an documents have ID receive
appropriate official and records wages packet
are required. and notifications
- Review
termination
notices and
approvals for a
sample of
terminated
employees.
8. All checks and - Physical Occurrence Checks prepared Examine
notices of electronic control over for nonexistent cancelled checks
payments not assets and employees or to make sure
distributed to records employees on that all of them
employees are vacation, or are properly
returned to the absent for other supported by
treasurer for reasons, are relevant
safekeeping and controlled and evidence
follow-up. safeguarded
9. Online ability to - Adequate - Accuracy An unapproved Check changing
add employees or separation of - Occurrence pay rate is pay rate on the
change pay rates to duties prevented payroll master
the payroll master - Proper files to
file is restricted via authorization supporting
passwords to of documents
authorized human transactions (Such as board
resource personnel. and activities minutes,…)
