nternal Control Questionnaire Items: Assertions, Tests of Controls, and PossibleErrors or Frauds. Following is a selection of items from the payroll processing internalcontrol questionnaire in Exhibit 5.15.1. Are names of terminated employees reported in writing to the payroll department?2. Are authorizations for deductions signed by the employee on file?3. Is there a timekeeping department (function) independent of the payroll department?4. Are timekeeping and cost accounting records (such as hours, dollars) reconciled withpayroll department calculations of hours and wages?Required:For each of the four preceding questions:a. Identify the assertion to which the question applies.b. Specify one test of controls an auditor could use to determine whether the control wasoperating effectively.c. Provide an example of an error or fraud that could occur if the control were absent orineffective.d. Identify a substantive auditing procedure that could detect errors or frauds that couldresult from the absence or ineffectiveness of the control items
nternal Control Questionnaire Items: Assertions, Tests of Controls, and Possible
Errors or Frauds. Following is a selection of items from the payroll processing internal
control questionnaire in Exhibit 5.15.
1. Are names of terminated employees reported in writing to the payroll department?
2. Are authorizations for deductions signed by the employee on file?
3. Is there a timekeeping department (function) independent of the payroll department?
4. Are timekeeping and cost accounting records (such as hours, dollars) reconciled with
payroll department calculations of hours and wages?
Required:
For each of the four preceding questions:
a. Identify the assertion to which the question applies.
b. Specify one test of controls an auditor could use to determine whether the control was
operating effectively.
c. Provide an example of an error or fraud that could occur if the control were absent or
ineffective.
d. Identify a substantive
result from the absence or ineffectiveness of the control items
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