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    Auditing Payroll Tests of Controls

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    Payroll Tests of Controls. See attached file for full problem description.

    The diagram describes several payroll tests of controls. It shows the direction of the tests, leading from samples of clock cards, payrolls, and cumulative year-to-date earnings records to blank squares.

    For each blank square, write a payroll test of controls procedure and describe the evidence it can produce.

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    Solution Preview

    1. Clock Cards to Payrolls (Trace Time): Controls- Batch Controls for processing time cards; test of control is: Comparison of batch totals to computer output, it will give evidence of completeness all events are recorded.

    2. Sample from payroll time match with clock cards: Controls - Pay roll accounting separated from personnel & supervision; test of control is collected through observation of separation of duties. It will give evidence of occurrence of event.

    3. Sample from payroll matches with bank statement: All Documents renumbered & numerical sequence reviewed; test of control: Account for numerical ...

    Solution Summary

    The solution writes payroll test of controls for the blank squares in the diagram.