Arnold Scwarzenegger was blur (just about everything) about how to explain to his nephew Donald Duck on audit of payroll section in his Californian government departments. The muscle man has asked you:
a) ummmm... duh* what should auditors look to achieve in audit assertion work relating to payroll? [4]
b) Descibe the procedures that can be used to ensure for a better payroll system. Demonstrate situations on improving the system. [4]
SUGGESTED ANSWER GUIDELINES
a) auditors seek to :
- wages are properly calculated
- employees are paid ensuring no phantom employees
-proper recordings are made and accounted for in the ledger payroll and correct classification
- proper deductions that are authorised and approved by employees and required by government
b) Exam approach : state on controls systems can be improved looking at Control Environment
state on control objectives / procedures to have stronger internal operations that is correct, accurate, appropriate, segregation of duties, authorised.
Demonstrations:
Control environment :
Competence match to employees salary
Application to PAYMENT : compare specific employee salary to industry average by enquiring of managers or industry expert for reasonableness test.
Control objectives :
Correct amount are paid to the respective employees.
Application to SETTING SALARIES & WAGES: check that all amount paid to employees that are banked in correspond with the payroll summary sheet generated from payroll department.
2 comments:
Hi candidates,
Please also pay attention to inventory audit evidence, In/exteranl auditors roles,audit risks and professional ethics.
Do 1% more than your very best.
Arnold = muscle man.
Marcus ong = Kluge mann
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