Exam 20: Audit of the Payroll and Personnel Cycle

Required disclosures for payroll and personnel cycle transactions and balances are extensive.

A detailed reconciliation of the information on the payroll tax forms and the payroll records must be prepared as part of the test of controls over the payroll cycle.

"Physical control over assets" is not a type of control that is applicable to the payroll cycle.

An analytical procedure to determine a possible misstatement of commission expense is to compare commission expense to salaries payable.

Most monetary misstatements of payroll are corrected by internal verification controls or by the PCAOB.

Which of the following is the best way for an auditor to determine that every name on a company's payroll for the Rodgers factory is that of a bona fide employee presently on the job?

Which of the following best describes the systems of internal control for payroll for large companies?

State the purpose and the information contained on the W-2 Form and on the payroll tax returns.

Auditors should determine whether the client has fulfilled its legal obligation in submitting payments of all payroll withholdings as part of their payroll tests.

Hiring personnel initiates the payroll and personnel cycle.

How do auditors commonly verify sales commission expense?

Which of the following statements about the payroll and personnel cycle is correct?

No individual with access to time cards,payroll records,or checks should also be permitted access to

Records that include data about employees such as employment date,performance ratings and pay rates are the

The ________ has the responsibility for approving the number of hours worked for each employee.

When testing for fraudulent hours or fraudulent expense reports

In testing for the transaction-related audit objective of occurrence,an auditor is verifying that the recorded payroll payments are for work actually performed by existing employees.List three key internal controls that a company should have in place in this area.

When the auditor compares the cancelled check or direct deposit with the payroll journal for amount,they are concerned with the transaction-related audit objective of

What are the two major balance-related audit objectives in testing payroll liabilities?

For proper internal control,the person(s)responsible for signing the payroll checks should not have access to timekeeping or be otherwise involved in the preparation of payroll.