ADM 3349 Lecture Notes - Lecture 9: Risk Assessment, General Ledger, Audit Evidence
20 Dec 2016
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Auditing class 9: march 22, 2016, chapter 13. Managements main focus on the authorization and validity of payroll payments and accuracy, to ensure only real employees are paid and only for the work that they have done. Dual-purpose by testing reliability of payroll summary reports. Use of analysis of annual payroll expense details for reasonableness. Payroll process watch for: payments to fictitious employees, more hours expensed than actually worked, classification for proper allocation to inventory and appropriate classes of expenditures. Authorization: a distinguished department such as hr with authority to do payroll activities, all pay data should be approved by employee"s supervisor. Custody: possession of paycheques, cash or eft codes used to pay employees, having a payroll distribution function, access to time cards (supervisor) Recordkeeping: payroll accounting that maintains individual payroll records, should correspond with company records and f/s. Periodic reconciliation: approval of payroll by supervisors, reconciliation to labour records. Payroll register record for each employee regarding pay items.
