2. Frauds involving Payroll The major payroll-related frauds include a. Fictitious Employees Adding fictitious employees to the payroll is one of the most common defalcations. Detecting fictitious employees on the payroll is very difficult; but auditors do sometimes perform a surprise payoff as a deterrent to this form of defalcation. Alternatively, the auditor may turn the check distribution over to an official not associated with preparing payroll, signing checks, or supervising workers. Personnel files and the employees' completed time cards and time tickets may also be
2. Frauds involving Payroll The major payroll-related frauds include a. Fictitious Employees Adding fictitious employees to the payroll is one of the most common defalcations. Detecting fictitious employees on the payroll is very difficult; but auditors do sometimes perform a surprise payoff as a deterrent to this form of defalcation. Alternatively, the auditor may turn the check distribution over to an official not associated with preparing payroll, signing checks, or supervising workers. Personnel files and the employees' completed time cards and time tickets may also be
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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EXPLAIN IT SIMPLE AND BRIEFLY. YOU CAN ALSO INCLUDE EXAMPLES.
Transcribed Image Text:2. Frauds involving Payroll
The major payroll-related frauds include
a. Fictitious Employees
Adding fictitious employees to the payroll is one of the most
common defalcations. Detecting fictitious employees on the
payroll is very difficult; but auditors do sometimes perform a
surprise payoff as a deterrent to this form of defalcation.
Alternatively, the auditor may turn the check distribution over
to an official not associated with preparing payroll, signing
checks, or supervising workers. Personnel files and the
employees' completed time cards and time tickets may also be
examined to substantiate the existence of absent employees.
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