FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
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?
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.
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- Should the SEC take tolerance on a company that recognizes and reports accounting irregularities and other frauds of the company?arrow_forwardWhich of the following audit findings would be considered a deficiency in internal controls in the revenue cycle? A. No evidence that price and quantity on an invoice was compared with supporting documentation. B. Quantity shipped differed from quantity billed. C. Recording sales several days before the shipment date. D. All of the above. E. None of the above.arrow_forwardConditions that warrant the need for strong controls relating to the payroll process include all of the following EXCEPT: Question 43 options: 1) Irregular pay schedules 2) Complex withholding arrangements 3) Frequent changes in pay rates 4) Low employee turnoverarrow_forward
- Which is correct ?arrow_forward6. In which of the following situations does the internal auditor potentially lack objectivity? a. A payroll accounting employee assists an internal auditor in verifying the physical inventory of small motors. b. An internal auditor discusses a significant issue with the vice president to whom the auditee reports prior to drafting the audit report. c. An internal auditor recommends standards of control and performance measures for a contract with a service organization for the processing of payroll and employee benefits. d. A former purchasing assistant performs a review of internal controls over purchasing four months after being transferred to the internal audit department.arrow_forwardHow might HR apply the accounting principle of auditing to uncover financial mismanagement on an employee's expense reports?arrow_forward
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