Payroll System

Question 1

Highest risk of material misstatement in payroll system

Answer 1

1. Potential fraud risk factors
2. Cut off starters’ and leavers’ wages

Question 2

The risk of not conducting sequence check for the GRNs of purchasing raw material is?

Answer 2

Completeness of payables

Question 3

If there are fewer capital purchases than standard purchases, is it necessary to undertake test of controls?

Answer 3

No, it wouldn’t be cost efficient.

Question 4

Test of Controls for asset additions?

Answer 4

1. Inspect the non current asset registry and ensure no duplicate of serial numbers of assets are present.
2. Sample of additions, check if a serial number is recorded on it and ensure its listen in the non current asset registry