Ennis Locatelli is a new payroll accountant at Avata Electronics. In his review of previous manual payroll records, he noted several errors that required the issuance of additional checks to employees for unpaid payroll amounts. What are Ennis’s options to avoid similar problems in the future?
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Ennis Locatelli is a new payroll accountant at Avata Electronics. In his review of previous manual payroll records, he noted several errors that required the issuance of additional checks to employees for unpaid payroll amounts. What are Ennis’s options to avoid similar problems in the future?
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- There are three employees in the accounting department: payroll clerk, accounts payable clerk, and accounts receivable clerk. Which one of these employees should not make the daily deposit? A. payroll clerk B. account payable clerk C. accounts receivable clerk D. none of themYour client is preparing financial statements to show the bank. You know that he has incurred a refrigeration repair expense during the month, but you see no such expense on the books. When you question the client, he tells you that he has not yet paid the 1,255 bill. Your client is on the accrual basis of accounting. He does not want the refrigeration repair expense on the books as of the end of the month because he wants his profits to look good for the bank. Is your client behaving ethically by suggesting that the refrigeration repair expense not be booked until the 1,255 is paid? Are you behaving ethically if you agree to the clients request? What principle is involved here?Mike 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…
- Susan Small, CPA has Medium Corporation as an audit client. Medium has asked Small to create and install a new computerized payroll system. Because Small does not have the appropriate level of expertise, she referred Medium to Compusystems, Inc., a local software consulting company. Small has an arrangement where she is paid ten percent of any fee received by Compusystems from her referrals. Small has disclosed this to her client. Required: The situation above involves a possible violation of the AICPA's Code of Professional Conduct. State the rule in question and explain why or why not there is a violation of the code. You need not refer to the rule number, but should clearly describe the rule in question.What is NOT an example of internal control procedures that help prevent payroll fraud? a.Outsource Payroll Administration b.Require mandatory vacations c.Make sure only one person handles payroll functions d.Conduct periodic unannounced auditsA large retail enterprise has established a policy that requires the paymaster to deliver all unclaimed payroll checks to the internal audit department at the end of each payroll distribution day. This policy was most likely adopted toa. Ensure that employees who were absent on a payroll distribution day are not paid for that day.b. Prevent the paymaster from cashing checks that are unclaimed for several weeks.c. Prevent a bona fide employee’s check from being claimed by another employee.d. Detect any fictitious employee who may have been placed on the payroll
- An auditor found that employee time records in one department are not properlyapproved by the supervisor. Which of the following could result?(1) Duplicate paychecks might be issued.(2) The wrong hourly rate could be used to calculate gross pay.(3) Employees might be paid for hours they did not work.(4) Payroll checks might not be distributed to the appropriate employeesJudy Bell, CPA is an independent auditor for a company called Best Products Incorporated. The management of Best Products has asked Judy if she could provide assistance with payroll processing. Judy has accepted this payroll process job and also wants to remain the auditor. Can Judy bell, CPA remain the auditor of Best Products incorporated and perform this nonattest service? If so is there anything that Judy Bell, CPA must consider when accepting and performing his service? Does it matter if Judy Bell, CPA wants to perform this nonattest service of payroll processing while serving as the auditor for a public company or private company?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.in 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.…
- 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.…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.…The following misstatements are included in the accountingrecords of Lathen Manufacturing Company:1. Joe Block and Frank Demery take turns “punching in” for each other every few days.The absent employee comes in at noon and tells his foreman that he had car troubleor some other problem. The foreman does not know that the employee is getting paidfor the time.2. The foreman submits a fraudulent time card for a former employee each week anddelivers the related payroll check to the employee’s house on the way home fromwork. They split the amount of the paycheck.3. Employees often overlook recording their hours worked on job-cost tickets asrequired by the system. Many of the client’s contracts are on a cost-plus basis.4. Direct labor was unintentionally charged to job 620 instead of job 602 by the payrollclerk when he key-entered the labor distribution sheets. Job 602 was completed andthe costs were expensed in the current year, whereas job 620 was included in workin-process.5. The payroll…