AUDITING RMU
11th Edition
ISBN: 9781260934830
Author: MESSIER
Publisher: MCGRAW-HILL HIGHER EDUCATION
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 12, Problem 12.27P
A
To determine
Introduction: The payroll audit is conducted by an auditor in order to be sure about the accuracy in the processes of payroll and to identify the reasons for overstatement or understatement if there is any misstatement in the payroll of the company.
To describe: The verification of the information in the payroll input form.
B
To determine
Introduction: The
To describe: The audit procedures that J should follow to examine the November payroll register.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
As the internal auditor for Permalite Products, you have been asked to document the company's payroll processing system. Based on your documentation, Permalite hopes to develop a plan for revising the current system to eliminate unnecessary delays in pay cheque processing. The head payroll clerk explained the system: The payroll processing system at Permalite Products is fairly simple. Time data are recorded in each department using time cards and clocks. It is annoying, however, when people forget to punch out at night, and they have to record their time by hand. At the end of the period, their payroll clerks enter the time card data into a payroll file for processing. The clerks are pretty good—though they have had to make a number of corrections when they mess up the data entry.
Before the payroll file is processed for the current period, human resources send personnel changes, such as increases in pay rates and new employees. The clerks enter this data into the payroll file.…
Holly employees use a time clock in an unsupervised area to record their time on the job. The timekeeping clerk tries to monitor the process but is often distracted by other duties. Every Friday, the shop foremen collect the time cards for their subordinates, review and approve them, and deliver them to the payroll clerk.
The payroll clerk uses a stand-alone PC to record the employee earnings in the employee records and print a hard-copy payroll register. The payroll clerk sends one copy of the payroll register to the accounting department. The clerk then files the time cards and a copy of the payroll register in the payroll department.
The accounting department clerk receives the payroll register, reviews it for accuracy, and uses the department computer to record the transaction by posting to subsidiary and GL accounts, including wages expense, cash, and various withholding accounts. The clerk then prints the hard-copy checks, which are written on the general cash account. The clerk…
Every month, the accounting manager reconciles the accounts receivable master file to the general ledger. Which management assertions apply to this control?
Chapter 12 Solutions
AUDITING RMU
Ch. 12 - Prob. 12.1RQCh. 12 - Prob. 12.2RQCh. 12 - Prob. 12.3RQCh. 12 - Prob. 12.4RQCh. 12 - Prob. 12.5RQCh. 12 - Prob. 12.6RQCh. 12 - Prob. 12.7RQCh. 12 - Prob. 12.8RQCh. 12 - Prob. 12.9RQCh. 12 - Prob. 12.10RQ
Ch. 12 - Prob. 12.11RQCh. 12 - Prob. 12.12RQCh. 12 - Prob. 12.13RQCh. 12 - Prob. 12.14MCQCh. 12 - Prob. 12.15MCQCh. 12 - Prob. 12.16MCQCh. 12 - Prob. 12.17MCQCh. 12 - Prob. 12.18MCQCh. 12 - Prob. 12.19MCQCh. 12 - Prob. 12.20MCQCh. 12 - Prob. 12.21MCQCh. 12 - Prob. 12.22MCQCh. 12 - Prob. 12.23MCQCh. 12 - Prob. 12.24PCh. 12 - Prob. 12.26PCh. 12 - Prob. 12.27P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Similar questions
- Home Depot Kenya ltd employees use a time clock in an unsupervised area to record their time on the job. The time-keeping clerk tries to monitor the process, but is often distracted by other duties. Every Friday, the shop foremen collect the time cards for their subordinates, review and approve them, and deliver them to the payroll clerk. The payroll clerk uses a stand-alone PC to record the employee earnings in the employee records and print a hard-copy payroll register. The payroll clerk sends one copy of the payroll register to the accounting department. The clerk then files the time cards and a copy of the payroll register in the payroll department. The accounting department clerk receives the payroll register, reviews it for accuracy, and uses the department computer to record the transaction by posting to subsidiary and general ledger accounts including wages expense, cash, and various withholding accounts. The clerk then prints the hard-copy checks, which are writ- ten on…arrow_forward31. Recording payroll in QuickBooks Online also updates the Employees List and payroll reports. b. Chart of Accounts List. c. W-4 information for all employees. d. employee's deductions and withholdings. 32. Activities identified as paying payroll liabilities are recorded in the a. Payroll Tax Center window. b. Employees List. c. Run Payroll window. d. Review and Submit window.arrow_forwardYou are tasked to perform cut-off procedures for expenses and its related payable. In testing the completeness/cut-off assertion, what document would you most likely inspect? A. Vendor invoice register 15 days before and 15 days after report date. B. Cash disbursement journal 15 days before and 15 days after report date. C. Accounts payabie subsidiary ledger. D. Purchase journal 15 days before and 15 days after report date.arrow_forward
- Payroll: Risks and Controls Below are some of the processes that are typically executed before, during, and after a payroll cycle: Employees record their hours worked. The supervisor reviews and approves each employee's time records with their signature. An officer from the Human Resources department updates employee files after receiving authorized records of overtime and leaves (vacations, illness, etc.) from the supervisor. Afterward, approved records are sent to the payroll officer in the accounting department. The payroll officer calculates the gross payment, applies deductions, and calculates the net payment. Subsequently, the final payroll is sent for the controller's approval. Payments are issued to employees using their preferred delivery method (check or direct deposit). Entries are generated for the corresponding payroll transactions. Withholdings for payroll taxes, Social Security, and Medicare are respectively remitted to the Department of Treasury and the Internal…arrow_forwardMike and his supervisor Claire are having a conversation one morning about one of their current audit clients internal controls over the payroll. Mike mentions to Claire that he has considered conducting a walkthrough of the client's payroll system but isn't exactly sure what documentation he might collect to support his walk through. Which of the following represent appropriate recommendations by Claire with respect to documentation Mike could collect? Select all that apply: 1. Mike should consider collecting source documents to support payroll transactions such as bills of lading 2. Mike should consider selecting and reviewing a sample of employee time cards for hourly employees, to verify hours worked 3. Mike could think about selecting a sample of payroll authorizations to ensure only authorized new employees are added to the payroll 4. Mike could examine payroll tax retums for the client, to ensure that employees are currently remitting federal, state, and local taxes to the…arrow_forwardThe following procedures were recently installed by Raspberry Creek Company:a. After necessary approvals have been obtained for the payment of a voucher, the treasurer signs and mails the check. The treasurer then stamps the voucher and supporting documentation as paid and returns the voucher and supporting documentation to the accounts payable clerk for filing.b. The accounts payable clerk prepares a voucher for each disbursement. The voucher along with the supporting documentation is forwarded to the treasurer’s office for approval.c. Along with petty cash expense receipts for postage, office supplies, etc., several postdated employee checks are in the petty cash fund.d. At the end of the day, cash register clerks are required to use their own funds to make up any cash shortages in their registers.e. At the end of each day, all cash receipts are placed in the bank’s night depository.f. At the end of each day, an accounting clerk compares the duplicate copy of the daily cash deposit…arrow_forward
- Home Depot Kenya ltd employees use a time clock in an unsupervised area to record theirtime on the job. The time-keeping clerk tries to monitor the process, but is often distracted by other duties. Every Friday, the shop foremen collect the time cards for their subordinates, review and approve them, and deliver them to the payroll clerk.The payroll clerk uses a stand-alone PC to record the employee earnings in the employeerecords and print a hard-copy payroll register. The payroll clerk sends one copy of the payrollregister to the accounting department. The clerk then files the time cards and a copy of thepayroll register in the payroll department.The accounting department clerk receives the payroll register, reviews it for accuracy, anduses the department computer to record the transaction by posting to subsidiary and generalledger accounts including wages expense, cash, and various withholding accounts. The clerkthen prints the hard-copy checks, which are written on the general cash…arrow_forwardJanice Dodds opens the mail for the Ajax Plumbing Company. She lists all customer checks on a spreadsheetthat includes the name of the customer and the check amount. The checks, along with the spreadsheet, are thensent to Jim Seymour in the accounting department who records the checks and deposits them daily in the company’s checking account. How could the company improve its internal control procedure for the handling of itscash receipts?arrow_forwardCornick, Inc. sells office products to businesses in the eastern region of the United States. Each month, the IT division at Cornick prints monthly statements and sends them to the accounts receivable (AR) department, where a clerk mails them to the customers. Cornick’s customers mail their payments back to Cornick, where a clerk in AR batches the checks and sends them to the cashier. The AR clerk then uses the payment stub to enter the payments into the computer, where the AR master data are updated to record the payment. create the Table of Entities and Activities.arrow_forward
- The following misstatements are included in the accounting records of Westgate Manufacturing Company. Each month, a fraudulent receiving report is submitted to accounting by an employee in the receiving department. A few days later, he sends Westgate an invoice for the quantity of goods ordered from a small company he owns and operates in the evening. A check is prepared, and the amount is paid when the receiving report and the vendor’s invoice are matched by the accounts payable clerk. Telephone expense (account 2112) was unintentionally charged to repairs and maintenance (account 2121). Required: For each misstatement, identify the transaction-related audit objective that was not met. For each misstatement, state a control that should have prevented it from occurring on a continuing basis. For each misstatement, state a substantive audit procedure that could uncover it.arrow_forwardBlake Hudnall is Conosis Incorporated's payroll accountant. During a casual conversation with coworkers, Blake learns that Teagan Vinkovic, a coworker, is deliberately overstating the number of hours worked during each pay period because of a personal economic situation. Required: Which ethical guidelines pertain to this situation? What should Blake do with this knowledge? Note: You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect. Encourage the employee to continue taking care of family needs as they have been Professional competence and due care in the proper preparation of the payroll and verify externally with the supervisor or manager the actual hours worked ? Professionalism to the company and ensuring that there is honest and true…arrow_forwardIn an automated payroll processing environment, a department manager substituted the time card for a terminated employee with a time card for a fictitious employee. The fictitious employee had the same pay rate and hours worked as the terminated employee. The best control technique to detect this action using employee identification numbers would be aa. batch total.b. record count.c. hash total.d. subsequent check.e. financial total.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub
How JOURNAL ENTRIES Work (in Accounting); Author: Accounting Stuff;https://www.youtube.com/watch?v=Y-_Q3rANyxU;License: Standard Youtube License