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Page 5 of 14 QUESTION 2 CLO 1 AND 4 CARMAX has several branches island wide. The company imports and sells motor vehicle parts and accessories to retail customers. With the increase in staff complement, the company has decided to implement a computerised wages system. All employees are required to work eight hours daily. The employees' hours are recorded using the magnetic card which is attached to their identification card. When each employee arrives for work, they hold their card close to the card reader. This must be done, as encoded in the reader is the employee's TRN and NIS number, which is linked to the payroll system. The reader recognises the magnetic information on the card, identifying the employee as being 'at work'. When the employee leaves work at the end of the day, the employee must log out by ensuring their ID is swiped, as the process is reversed showing that the employee has left work. The information that is used to calculate the employees' weekly salary is obtained directly from the magnetic card information. Overtime is calculated as any excess over the standard hours worked. Any overtime over 15% of standard hours is sent on a computer-generated report by email to the Chief Accountant. If necessary, the PayToll Manger overrides overtime payments if the hours worked are incorrect. Statutory deductions and net pay are also computer calculated, with payments being lodged directly into the employee's bank account. The only other manual check, is the Chief Accountant authorising the funding of the salaries bank account form CARMAX main account, having reviewed the list of wages to be paid. (b) Explain six (6) examples of audit tests that can be done on CARMAX wages system, using audit software. 390 words

Page 5 of 14 QUESTION 2 CLO 1 AND 4 CARMAX has several branches island wide. The company imports and sells motor vehicle parts and accessories to retail customers. With the increase in staff complement, the company has decided to implement a computerised wages system. All employees are required to work eight hours daily. The employees' hours are recorded using the magnetic card which is attached to their identification card. When each employee arrives for work, they hold their card close to the card reader. This must be done, as encoded in the reader is the employee's TRN and NIS number, which is linked to the payroll system. The reader recognises the magnetic information on the card, identifying the employee as being 'at work'. When the employee leaves work at the end of the day, the employee must log out by ensuring their ID is swiped, as the process is reversed showing that the employee has left work. The information that is used to calculate the employees' weekly salary is obtained directly from the magnetic card information. Overtime is calculated as any excess over the standard hours worked. Any overtime over 15% of standard hours is sent on a computer-generated report by email to the Chief Accountant. If necessary, the PayToll Manger overrides overtime payments if the hours worked are incorrect. Statutory deductions and net pay are also computer calculated, with payments being lodged directly into the employee's bank account. The only other manual check, is the Chief Accountant authorising the funding of the salaries bank account form CARMAX main account, having reviewed the list of wages to be paid. (b) Explain six (6) examples of audit tests that can be done on CARMAX wages system, using audit software. 390 words

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Page 5 of 14 QUESTION 2 CLO 1 AND 4 CARMAX has several branches island wide. The company imports and sells motor vehicle parts and accessories to retail customers. With the increase in staff complement, the company has decided to implement a computerised wages system. All employees are required to work eight hours daily. The employees' hours are recorded using the magnetic card which is attached to their identification card. When each employee arrives for work, they hold their card close to the card reader. This must be done, as encoded in the reader is the employee's TRN and NIS number, which is linked to the payroll system. The reader recognises the magnetic information on the card, identifying the employee as being 'at work'. When the employee leaves work at the end of the dáy, the employee must log out by ensuring their ID is swiped, as the process is reversed showing that the employee has left work. The information that is used to calculate the employees' weekly salary is obtained directly from the magnetic card information. Overtime is calculated as any excess over the standard hours worked. Any overtime over 15% of standard hours is sent on a computer-generated report by email to the Chief Accountant. If necessary, the Payroll Manger overrides overtime payments if the hours worked are incorrect. Statutory deductions and net pay are also computer calculated, with payments being lodged directly into the employee's bank account. The only other manual check, is the Chief Accountant authorising the funding of the salaries bank account form CARMAX main account, having reviewed the list of wages to be paid. (b) Explain six (6) examples of audit tests that can be done on CARMAX wages system, using audit software. 2390 words X 資文
Transcribed Image Text:Page 5 of 14 QUESTION 2 CLO 1 AND 4 CARMAX has several branches island wide. The company imports and sells motor vehicle parts and accessories to retail customers. With the increase in staff complement, the company has decided to implement a computerised wages system. All employees are required to work eight hours daily. The employees' hours are recorded using the magnetic card which is attached to their identification card. When each employee arrives for work, they hold their card close to the card reader. This must be done, as encoded in the reader is the employee's TRN and NIS number, which is linked to the payroll system. The reader recognises the magnetic information on the card, identifying the employee as being 'at work'. When the employee leaves work at the end of the dáy, the employee must log out by ensuring their ID is swiped, as the process is reversed showing that the employee has left work. The information that is used to calculate the employees' weekly salary is obtained directly from the magnetic card information. Overtime is calculated as any excess over the standard hours worked. Any overtime over 15% of standard hours is sent on a computer-generated report by email to the Chief Accountant. If necessary, the Payroll Manger overrides overtime payments if the hours worked are incorrect. Statutory deductions and net pay are also computer calculated, with payments being lodged directly into the employee's bank account. The only other manual check, is the Chief Accountant authorising the funding of the salaries bank account form CARMAX main account, having reviewed the list of wages to be paid. (b) Explain six (6) examples of audit tests that can be done on CARMAX wages system, using audit software. 2390 words X 資文
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