Auditing And Assurance Services
17th Edition
ISBN: 9780134897431
Author: ARENS, Alvin A.
Publisher: PEARSON
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Chapter 20, Problem 15RQ
To determine
Explain the reason for its being common to verify officer’s total compensation even after the excellent ‘test of controls’ and ‘substantive test of transaction’.
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Students have asked these similar questions
What audit procedures can be used to verify officers’ compensation?
What are the most common errors and frauds in the personnel and payroll cycle? Which control characteristics are auditors looking for to prevent or detect these errors and frauds?
If a client uses ADP, a service center, for processing payroll,
None of these.
auditing standards require the auditor to test ADP’s controls since the service center application involves processing significant financial data.
the auditor can assume that the controls are adequate because it is an independent enterprise.
and the user auditor decides to rely on ADP’s auditor's report, the user auditor must make reference to the report of the service auditor in the opinion on the user organization's financial statements.
Chapter 20 Solutions
Auditing And Assurance Services
Ch. 20 - Prob. 1RQCh. 20 - Prob. 2RQCh. 20 - Distinguish among a payroll master file, a W-2...Ch. 20 - Prob. 4RQCh. 20 - Prob. 5RQCh. 20 - Prob. 6RQCh. 20 - Prob. 7RQCh. 20 - Prob. 8RQCh. 20 - Prob. 9RQCh. 20 - Prob. 10RQ
Ch. 20 - Prob. 11RQCh. 20 - Prob. 12RQCh. 20 - Prob. 13RQCh. 20 - Prob. 14RQCh. 20 - Prob. 15RQCh. 20 - Prob. 16.1MCQCh. 20 - Prob. 16.2MCQCh. 20 - Prob. 16.3MCQCh. 20 - Prob. 17.1MCQCh. 20 - Prob. 17.2MCQCh. 20 - Prob. 17.3MCQCh. 20 - Prob. 18.1MCQCh. 20 - Prob. 18.2MCQCh. 20 - Prob. 18.3MCQCh. 20 - Prob. 19DQPCh. 20 - Prob. 20DQPCh. 20 - Prob. 21DQPCh. 20 - Prob. 22DQPCh. 20 - Prob. 23DQPCh. 20 - Prob. 24DQPCh. 20 - Prob. 25DQPCh. 20 - Prob. 26DQPCh. 20 - Prob. 27DQPCh. 20 - Prob. 28C
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Similar questions
- What are the most frequent mistakes and scams that occur in the payroll and personnel processes?? In order to avoid or discover these blunders and scams, what are auditors searching for?arrow_forwardwould unpaid payroll taxes be fairly easily uncovered in an audit? Can employees try to conceal the non-payment? What are specific tests of controls that can be performed? Can outsourcing eliminate this risk?arrow_forwardThe following are typical questions that might appear on an internal control questionnaire for payroll activities: 1. Is there adequate separation of duties between employees who maintain human resources records and employees who approve payroll disbursements? 2. Is there adequate separation of duties between personnel who maintain timekeeping or attendance records for employees and employees who distribute payroll checks? Assuming that the operating effectiveness of each of the above controls is found to be inadequate, describe how the auditors might alter their substantive procedures to compensate for the increased level of control risk.arrow_forward
- Evaluate the difficulties associated with preventing and detecting payroll fraud.arrow_forwardDefine and explain the differences among several kinds of employee frauds that might occur at an audit client.arrow_forwardThe following are typical questions that might appear on an internal control questionnaire for payroll activities: 1. Is there adequate separation of duties between employees who maintain human resources records and employees who approve payroll disbursements? 2. Is there adequate separation of duties between personnel who maintain timekeeping or attendance records for employees and employees who distribute payroll checks? Describe the manner in which each of the above controls might be tested.arrow_forward
- What are some questions I can ask for an employee about their knowledge about collusion in auditing?arrow_forwardWhich of the following statements reflects an auditor’s responsibility for detectingfraud?(1) An auditor is responsible for detecting employee errors and simple fraud, butnot for discovering fraudulent acts involving employee collusion or managementoverride.(2) An auditor should plan the audit to detect fraud caused by departures from GAAP.(3) An auditor is not responsible for detecting fraud unless the application of auditingstandards would result in such detection.(4) An auditor should design the audit to provide reasonable assurance of detectingerrors and fraud that are material to the financial statements.arrow_forwardThe purpose of separating the duties of hiring personnel and distributing payroll checks is toseparate thea. Authorization of transactions from the custody of related assets.b. Operational responsibility from the record-keeping responsibility.c. Human resources function from the controllership function.d. Administrative controls from the internal accounting controls.arrow_forward
- The following are typical questions that might appear on an internal control questionnaire for payroll activities: 1. Is there adequate separation of duties between employees who maintain human resources records and employees who approve payroll disbursements? 2. Is there adequate separation of duties between personnel who maintain timekeeping or attendance records for employees and employees who distribute payroll checks? Describe the purpose of each of the above controlsarrow_forwardIn the event of payroll fraud, discuss the suggestion that the human elements of control systems are frequently more important than the software elements in ensuring that records are correct.arrow_forwardEmployee Embezzlement via Cash Receipts and Payment of Personal Expenses.Assume you have received a message from an informant regarding the following case. Your assignment is to write the “audit approach” portion of the case.a. Write a brief explanation of desirable controls, missing controls, and especially the kinds of “deviations” that might arise from the situation described in the case.b. Develop some procedures for obtaining evidence about existing controls, especially procedures that could discover deviations from controls. If there are no controls to test, then there are no procedures to perform. Then just move on to part (c). An audit “procedure” should instruct someone about the source(s) of evidence to obtain and the work to perform.c. Write some procedures for gathering evidence in this case.d. Write a short statement about the discovery you expect to accomplish with your procedures.The Extra Bank AccountThe Ourtown Independent School District, like all others, had formal,…arrow_forward
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