Question 1

Which of the following types of audit tests is usually emphasized due to a lack of independent third-party evidence related to payroll transactions?

Accepted Answer

A)  analytical procedures
B)  tests of details of balances
C)  tests of controls
D)  Each of the above is emphasized.

Question 2

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

Accepted Answer

A)  employees have not yet cashed their payroll checks.
B)  fraudulent transfer of funds by the company.
C)  lack of controls over payroll distribution.
D)  the company is overpaying its employees.

Question 3

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

Accepted Answer

A surprise payroll payoff is a procedure...

Question 4

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

Accepted Answer

A)  interviewing job candidates
B)  hiring a new employee
C)  existing employees submitting requests for payment for work performed
D)  issuance of paychecks

Question 5

There is inherent risk of payroll fraud because most transactions involve

Accepted Answer

A)  expense accounts.
B)  accrued liabilities.
C)  estimates.
D)  cash.

Question 6

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

Accepted Answer

Generally inherent risk is set low since...

Question 7

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

Accepted Answer

The primary documents and records used i...

Question 8

Auditors seldom expect to find misstatements when testing payroll transactions.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is an accurate statement regarding nonexistent employees?

Accepted Answer

A)  In order to prevent this type of fraud,the foreman should distribute the paychecks and approve the time cards.
B)  Records for all terminated employees should be destroyed to prevent this type of fraud.
C)  The person committing this type of fraud is generally the CEO or CFO of the company.
D)  This type of fraud often results from the continuance of an employee on the payroll after the employee has been terminated.

Question 10

Which of the following best describes effective internal control over payroll?

Accepted Answer

A)  The preparation of the payroll must be under the control of the personnel department.
B)  The confidentiality of employee payroll data should be carefully protected to prevent fraud.
C)  The duties of hiring,payroll computation,and payment to employees should be segregated.
D)  The payment of cash to employees should be replaced with payment by checks.

Question 11

There are several key internal controls over the payment of payroll function that should be present.For example,the payroll should be distributed by someone who is not involved in the other payroll functions.Discuss other key internal controls over the payment of payroll function as it relates to the physical control over assets and records.

Accepted Answer

•If employees are paid through direct de...

Question 12

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

Accepted Answer

A)  Trace transactions recorded in the payroll journal to the human resources department to determine employment status.
B)  Examine cancelled checks for proper endorsement.
C)  Recalculate net pay.
D)  Reconcile the disbursements in the payroll journal with the disbursements on the payroll bank statement.

Question 13

Since the amount of expense report reimbursements is insignificant,auditors can ignore expense reports for officers and directors.

Accepted Answer

A) True 
 B)False

Exam 20: Audit of the Payroll and Personnel Cycle

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

Correct Answer
verified
A surprise payroll payoff is a procedure...
View Answer

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

Correct Answer
verified

Which of the following is an accurate statement regarding nonexistent employees?

Correct Answer
verified

Auditors seldom expect to find misstatements when testing payroll transactions.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified
•If employees are paid through direct de...
View Answer

There is inherent risk of payroll fraud because most transactions involve

Correct Answer
verified

Which of the following types of audit tests is usually emphasized due to a lack of independent third-party evidence related to payroll transactions?

Correct Answer
verified

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

Correct Answer
verified
The primary documents and records used i...
View Answer

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

Correct Answer
verified
Generally inherent risk is set low since...
View Answer

Since the amount of expense report reimbursements is insignificant,auditors can ignore expense reports for officers and directors.

Correct Answer
verified

Which of the following best describes effective internal control over payroll?

Correct Answer
verified

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

Correct Answer
verified

Exam 20: Audit of the Payroll and Personnel Cycle

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

Correct AnswerverifiedA surprise payroll payoff is a procedure...View AnswerShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is an accurate statement regarding nonexistent employees?

Correct AnswerverifiedShow Answer

Auditors seldom expect to find misstatements when testing payroll transactions.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answerverified•If employees are paid through direct de...View AnswerShow Answer

There is inherent risk of payroll fraud because most transactions involve

Correct AnswerverifiedShow Answer

Which of the following types of audit tests is usually emphasized due to a lack of independent third-party evidence related to payroll transactions?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedThe primary documents and records used i...View AnswerShow Answer

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

Correct AnswerverifiedGenerally inherent risk is set low since...View AnswerShow Answer

Since the amount of expense report reimbursements is insignificant,auditors can ignore expense reports for officers and directors.

Correct AnswerverifiedShow Answer

Which of the following best describes effective internal control over payroll?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified
A surprise payroll payoff is a procedure...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
•If employees are paid through direct de...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The primary documents and records used i...
View Answer

Correct Answer
verified
Generally inherent risk is set low since...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified