Question 1

Which department should be authorized to add and delete employees from the payroll or change pay rates and deductions?

Accepted Answer

A)  the supervising department 
B)  the accounting department 
C)  the human resources department 
D)  the treasurer's department 
A)  the supervising department 
B)  the accounting department 
C)  the human resources department 
D)  the treasurer's department

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

Most companies, with the exception of small ones, have effective controls over the payroll cycle.

Accepted Answer

A) True 
 B)False

Question 4

Once the auditor determines that the company's policy for accruing wages is consistent with prior years, the appropriate audit procedure to test for accuracy and cutoff is:

Accepted Answer

A)  recalculating the client's accrual. 
B)  performing extensive tests of controls. 
C)  performing extensive tests of details. 
D)  none of the above. 
A)  recalculating the client's accrual. 
B)  performing extensive tests of controls. 
C)  performing extensive tests of details. 
D)  none of the above.

Question 5

The careful and timely preparation of all payroll tax returns is necessary to avoid penalties and criminal charges. The most important control in the timely preparation of these returns is:

Accepted Answer

A)  computerized preparation of tax returns. 
B)  a well-defined set of policies that indicate when each form must be filed. 
C)  independent verification of computer output by a competent individual. 
D)  a Gaant chart. 
A)  computerized preparation of tax returns. 
B)  a well-defined set of policies that indicate when each form must be filed. 
C)  independent verification of computer output by a competent individual. 
D)  a Gaant chart.

Question 6

Because of the cycle's pervasive nature, audit tests of the payroll cycle are usually extensive.

Accepted Answer

A) True 
 B)False

Question 7

There are several key internal controls over the timekeeping and payroll preparation function that should be present. For example, adequate control over the time on employees' time cards includes the use of a time clock or other method of making certain that employees are paid for the number of hours they worked. Discuss other key internal controls over the timekeeping and payroll preparation function.

Accepted Answer

Internal controls over the timekeeping a

Question 8

What is one audit procedure that may be used to test for proper handling of terminated employees?

Accepted Answer

A procedure that tests for proper handli

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

In audits of companies in which payroll is a significant portion of inventory, the improper account classification of payroll can:

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 11

Which of the following is not an assertion related to the classes of transactions underlying the payroll cycle?

Accepted Answer

A)  Classification 
B)  Accuracy 
C)  Existence 
D)  Occurrence 
A)  Classification 
B)  Accuracy 
C)  Existence 
D)  Occurrence

Question 12

Payroll checks should be distributed by someone independent of the payroll and timekeeping functions.

Accepted Answer

A) True 
 B)False

Question 13

What key separation of duties should the auditor expect to find within the payroll and personnel cycle?

Accepted Answer

The human resources department should be

Which department should be authorized to add and delete employees from the payroll or change pay rates and deductions?

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

Most companies, with the exception of small ones, have effective controls over the payroll cycle.

Once the auditor determines that the company's policy for accruing wages is consistent with prior years, the appropriate audit procedure to test for accuracy and cutoff is:

The careful and timely preparation of all payroll tax returns is necessary to avoid penalties and criminal charges. The most important control in the timely preparation of these returns is:

Because of the cycle's pervasive nature, audit tests of the payroll cycle are usually extensive.

What is one audit procedure that may be used to test for proper handling of terminated employees?

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

In audits of companies in which payroll is a significant portion of inventory, the improper account classification of payroll can:

Which of the following is not an assertion related to the classes of transactions underlying the payroll cycle?

Payroll checks should be distributed by someone independent of the payroll and timekeeping functions.

What key separation of duties should the auditor expect to find within the payroll and personnel cycle?

The Demand for Audit and Other Assurance Services

The CPA Profession

Audit Reports

Professional Ethics

Legal Liability

The CPA Profession

Audit Evidence

Audit Planning and Analytical Procedures

Materiality and Risk

Section 404 Audits of Internal Control and Control Risk

Fraud Auditing

The Impact of Information Technology on the Audit Process

Overall Audit Plan and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling for Tests of Details and Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls and Substantive Tests of Transactions, and Accounts Payable

Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts

Audit of the Inventory and Warehousing Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash Balances

Completing the Audit

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

Filters

Exam 20: Audit of the Payroll and Personnel Cycle

Which department should be authorized to add and delete employees from the payroll or change pay rates and deductions?

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

Most companies, with the exception of small ones, have effective controls over the payroll cycle.

Once the auditor determines that the company's policy for accruing wages is consistent with prior years, the appropriate audit procedure to test for accuracy and cutoff is:

The careful and timely preparation of all payroll tax returns is necessary to avoid penalties and criminal charges. The most important control in the timely preparation of these returns is:

Because of the cycle's pervasive nature, audit tests of the payroll cycle are usually extensive.

What is one audit procedure that may be used to test for proper handling of terminated employees?

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

In audits of companies in which payroll is a significant portion of inventory, the improper account classification of payroll can:

Which of the following is not an assertion related to the classes of transactions underlying the payroll cycle?

Payroll checks should be distributed by someone independent of the payroll and timekeeping functions.

What key separation of duties should the auditor expect to find within the payroll and personnel cycle?

The Demand for Audit and Other Assurance Services

The CPA Profession

Audit Reports

Professional Ethics

Legal Liability

The CPA Profession

Audit Evidence

Audit Planning and Analytical Procedures

Materiality and Risk

Section 404 Audits of Internal Control and Control Risk

Fraud Auditing

The Impact of Information Technology on the Audit Process

Overall Audit Plan and Audit Program

Audit of the Sales and Collection Cycle: Tests of Controls and Substantive Tests of Transactions

Audit Sampling for Tests of Controls and Substantive Tests of Transactions

Completing the Tests in the Sales and Collection Cycle: Accounts Receivable

Audit Sampling for Tests of Details and Balances

Audit of the Acquisition and Payment Cycle: Tests of Controls and Substantive Tests of Transactions, and Accounts Payable

Completing the Tests in the Acquisition and Payment Cycle: Verification of Selected Accounts

Audit of the Inventory and Warehousing Cycle

Audit of the Capital Acquisition and Repayment Cycle

Audit of Cash Balances

Completing the Audit

Other Assurance Services

Internal and Governmental Financial Auditing and Operational Auditing

Filters