AUD-Lesson 3_Payroll Cycle_Internal Control Continued

Question 1

Which department approves changes in pay rates and deductions from employee salaries?

Answer 1

HR Department

Question 2

What department calculates pay?

Answer 2

Payroll

Question 3

Which department issues the checks to employees?

Answer 3

Treasury

Question 4

If checks are unclaimed, do they go back to Payroll?

Answer 4

No, they go to Treasury. Only Treasury issues the checks

Question 5

Who does the bank reconciliation?

Answer 5

The Controller

Question 6

How does an auditor (user auditor) evaluate the effectiveness of payroll controls when payroll services are provided by an outside vendor such as ADP?

Answer 6

The user auditor obtains an the audit opinion on the internal controls of the service provider that was provided by the service auditor.