Checklist for the Payroll Cycle

2111 WordsJan 1, 20139 Pages
[pic] Session 6: Session 6: Audit Evidence, Internal Control and Audit testing. • Internal Controls Systems Over The Payroll Cycle • Internal Control Checklists For The Payroll Cycle • Tests Of Control Of Payroll • Internal Controls Systems Over The Stock Cycle • Internal Control Checklists For The Stock Cycle • Tests Of Control Of Stock INTERNAL CONTROLS OVER PAYROLL To understand the need for controls, it is helpful to break down the payroll process into its component stages. The table shows the various stages of the payroll “cycle”, together with: |Stage in Cycle |Risks/Objectives |Procedures…show more content…
| | | |Pay list authorised before sending to Bank | |Employees and Tax |Wrong amounts paid to tax authorities |Use Payroll control account, and follow up on | |authorities paid |Taxes paid late |differences | | |Employees paid late |Have set system of payment to ensure deadlines not | | |Where staff paid in cash, it is stolen |missed | | | |Avoid paying in cash | | | |Where cash wages exist, use sealed envelopes | | | |Employee counts wages, and signs for them | | | |Only actual employee can receive and sign for wages | | | |Uncollected wages kept in safe until collection | NOTES • All documents should be pre-numbered in a sequence, so that completeness and validity are easy to verify • All documents should be

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