Checklist for the Payroll Cycle

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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 |
|Salary Info collected from |Staff punch clock cards for friends |All timesheets signed off as correct by line managers |
|clock cards, timesheets etc|Timesheets claim false hours |Clock card machine in open view |
| |Overtime is claimed that was never worked |Clocking in/out supervised |
| | |Clock cards kept somewhere secure when not in use |
| | |Clock cards sequenced, and sequence checked each day |
| | |Clock cards checked to personnel records, to ensure no |
| | |fake employees |
| | |All overtime authorised in advance, and reviewed when |
| | |claimed |
|Adjustments made for |Start/leaving dates wrong