Exam 20: Audit of the Payroll and Personnel Cycle

The usual audit test for a public company's officer compensation is to obtain the authorized salary of each officer from the minutes of the board of directors and compare it with

(Multiple Choice)

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Question 61

Which of the following departments is most likely responsible for pay rate changes and changes in deductible amounts for employees?

(Multiple Choice)

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Question 62

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?

(Multiple Choice)

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Question 63

The job time ticket indicates the starting and stopping times of work during the pay period.

(True/False)

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Question 64

Which of the following is not a correct statement regarding fraudulent hours?

(Multiple Choice)

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Question 65

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

(Essay)

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Question 66

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

(Multiple Choice)

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Question 67

Discuss the two circumstances under which auditors would extend their procedures considerably in the audit of payroll.

(Essay)

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Question 68

It would be appropriate for the payroll department to be responsible for which of the following functions?

(Multiple Choice)

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Question 69

Mathews and Company has $112,000 in an accrued payroll account. The company's weekly payroll is $186,700 and the accrual represents 3 days out of 5 working days. If the auditor has determined that controls are effective over payroll, what additional work should the auditor perform for this account?

(Essay)

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Question 70

The two major balance-related audit objectives in testing payroll liabilities are accuracy and cutoff.

(True/False)

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Question 71

Discuss three important differences between the payroll and personnel cycle and other cycles in a typical audit.

(Essay)

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Question 72

A transaction-related audit objective includes ensuring payroll transactions are properly aggregated and disclosed in the financial statements.

(True/False)

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Question 73

The treasurer in some firms may be a source for the auditor to trace information back to regarding employment contracts, compensation, and bonus plans.

(True/False)

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Question 74

Which of the following types of audit procedures is ordinarily emphasized the least when auditing payroll?

(Multiple Choice)

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Question 75

Audit software also allows auditors to perform analytical auditing procedures on payroll-related data at more disaggregated levels.

(True/False)

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Question 76

The Securities and Exchange Commission requires public companies to disclose the ratio of the compensation of the chief executive officer (CEO) to the median compensation of its employees in proxy statements and in annual reports requiring executive compensation disclosure.

(True/False)

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Question 77

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.

(True/False)

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Question 78

The primary concern in testing payroll-related liabilities is to make sure that

(Multiple Choice)

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Question 79

Match seven of the terms for documents and records (a-k) used in the payroll and personnel cycle with the descriptions provided below (1-7).

records including date of employment personnel investigations rates of pay etc.

deduction authorization form

a file used for recording payroll transactions for each employee and maintaining total employee wages paid for the year to date

payroll journal

a document indicating the time the hourly employee started and stopped working

summary payroll report

Correct Answer:

Verified

records including date of employment personnel investigations rates of pay etc.

a file used for recording payroll transactions for each employee and maintaining total employee wages paid for the year to date

a document indicating the time the hourly employee started and stopped working

a form indicating which jobs an employee worked on during a given time period and federal units of government for the payment of withheld taxes and the employer's tax

a form used to authorize the amount of pay

forms submitted to local state

a form authorizing payroll deductions including the number of exemptions for withholding of income taxes retirement savings plans and union dues

(Matching)

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Question 80

Showing 61 - 80 of 130

Exam 20: Audit of the Payroll and Personnel Cycle

The usual audit test for a public company's officer compensation is to obtain the authorized salary of each officer from the minutes of the board of directors and compare it with

Which of the following departments is most likely responsible for pay rate changes and changes in deductible amounts for employees?

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?

The job time ticket indicates the starting and stopping times of work during the pay period.

Which of the following is not a correct statement regarding fraudulent hours?

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

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

Discuss the two circumstances under which auditors would extend their procedures considerably in the audit of payroll.

It would be appropriate for the payroll department to be responsible for which of the following functions?

Mathews and Company has $112,000 in an accrued payroll account. The company's weekly payroll is $186,700 and the accrual represents 3 days out of 5 working days. If the auditor has determined that controls are effective over payroll, what additional work should the auditor perform for this account?

The two major balance-related audit objectives in testing payroll liabilities are accuracy and cutoff.

Discuss three important differences between the payroll and personnel cycle and other cycles in a typical audit.

A transaction-related audit objective includes ensuring payroll transactions are properly aggregated and disclosed in the financial statements.

The treasurer in some firms may be a source for the auditor to trace information back to regarding employment contracts, compensation, and bonus plans.

Which of the following types of audit procedures is ordinarily emphasized the least when auditing payroll?

Audit software also allows auditors to perform analytical auditing procedures on payroll-related data at more disaggregated levels.

The Securities and Exchange Commission requires public companies to disclose the ratio of the compensation of the chief executive officer (CEO) to the median compensation of its employees in proxy statements and in annual reports requiring executive compensation disclosure.

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.

The primary concern in testing payroll-related liabilities is to make sure that

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