Exam 20: Audit of the Payroll and Personnel Cycle

Effective internal accounting control over unclaimed payroll checks that are kept by the company would include accounting department procedures that require:

How do auditors commonly verify sales commission expense?

When a client uses an outside payroll service for processing payroll, professional auditing standards require the auditor to rely on the internal controls of the service organization if the service organization's auditor has issued a favorable report on internal controls.

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

Which of the following is not a procedure that can be performed on canceled checks in an effort to detect defalcations?

Discuss the procedures involved in, and the purpose of, a surprise payroll payoff.

The payroll and personnel cycle begins with which of the following events?

If an auditor wishes to test the completeness transaction-related audit objective in the payroll and personnel cycle, which of the following would be a reasonable test of control?

Which of the following includes all payroll transactions processed by the accounting system for a given period of time?

Which of the following audit procedures would be the most effective in testing for nonexistent employees?

Generally, is the inherent risk level for the audit of the payroll and personnel set at low, moderate, or high? Explain.

Which of the following internal control objectives is likely to be the most important in the audit of the payroll cycle?

The most important means of verifying account balances in the payroll and personnel cycle are:

An imprest payroll account that has a significant balance may indicate the presence of:

When examining payroll transactions, an auditor is primarily concerned with the possibility of:

The payroll and personnel cycle ends with which of the following events?

The nature, extent, and timing of substantive tests of payroll transactions vary depending, in part, on assessed control risk.

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

Discuss each of the following documents and records used in the timekeeping and payroll preparation function in the payroll and personnel cycle: time card, job time ticket, summary payroll report, payroll journal and payroll master file.

The computer file used for recording payroll transactions for each employee and maintaining total wages paid for the year to date is the: