Recognition of payroll liability Payroll System (1)

Question 1

What is risk (ficticious)

Answer 1

That ficticious employees are paid

Question 2

What is control objectives (ficticious)

Answer 2

Ensure that only individuals which are bonafide employees are paid

Question 3

What is controls (form) (ficticious)

Answer 3

When new joiners taken or employees leave, HR should complete and sign a joiners/leaves form which is signedpassed to payroll. Payroll then makes amendments to the system

Question 4

What is controls (personnel) (ficticious)

Answer 4

Personnel files should be held for all employees

Question 5

What is controls (employee) (ficticious)

Answer 5

Assign unique employee numbers to each employee in the payroll master file. Only employees with valid number can be paid

Question 6

What is tests of controls (documentation) (ficticious)

Answer 6

Obtain a list of joiners/leavers during period and trace a sample to ensure appropriate HR documentation was completed and payroll system amendment was made accurately

Question 7

What is tests of controls (sample) (ficticious)

Answer 7

Select a sample of starters and leavers during a period and determine whether they were genuine employees by tracing employee details back to personnel files

Question 8

What is tests of controls (procedures) (ficticious)

Answer 8

Review procedures for entering and removing employee numbers from the payroll system