Assertion and Related Control Activity - Payroll Flashcards
(18 cards)
Occurrence - Adequate personnel files
Review and test personnel files
Occurrence - Initiation of changes in employment status, wages or salaries, and benefits made by operating departments reported to the office of human resources
Review and test client’s procedures for changing employee’s records
Occurrence - Time clocks used to record time
Observe employees’ use of time clock
Occurrence - Time cards approved by supervisors
Inspect time cards presented for approval by supervisor
Occurrence - Only employees with valid employee numbers paid
Review and test client’s procedures for entering and removing employee numbers from the payroll master file
Occurrence - Use of payroll budgets with review by departmental supervisors
Review client’s budgeting procedures
Completeness - Pre-numbered time cards accounted for by client personnel
Check numerical sequence of time cards
Completeness - Verification that all employees in the master payroll file submitted a time card for the pay period.
Review and test client’s verification procedures
Authorization - Authorization procedures for (hiring and terminating employees, time worked, wage, salary, and commission rates, withholdings, benefits, and issuing payroll check
Review and test authorization procedures for each point of authentication in the payroll cycle
Accuracy - Verification of payroll amounts and benefit calculations
Review and test client’s verification procedures
Accuracy - Use of payroll budgets with review by department supervisors
Review client’s budgeting procedures
Accuracy - Changes to master payroll file verified through “before and after” reports and then reconciled to general ledger
Test reconciliation of “before and after” reports to payroll master file, and review reconciliation of master file to general ledger
Cutoff - Notices of additions, terminations, and changes to salaries, wages, and deductions reported promptly to the payroll processing function, after which the changes are updated promptly on the master payroll file
Review and test client’s procedures for changes to master payroll file
Cutoff - All time sheets forwarded to the payroll department weekly
Review and test procedures for processing time sheets
Cutoff - Procedures that require recording payroll liabilities as soon as possible after they are incurred
Review and test procedures for recording payroll liabilities
Classification - Chart of accounts
Review chart of accounts
Classification - Independent approval and review of accounts charged for payroll
Review and test procedures for classifying payroll costs
Classification - Use of payroll budgets with review by department supervisors
Review client’s budgeting procedures
